SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                   FORM 10-K

   (Mark One)

   [X]   ANNUAL  REPORT PURSUANT TO SECTION  13 OR 15(d)  OF THE SECURITIES
         EXCHANGE ACT OF 1934 [FEE REQUIRED]

   For the fiscal year ended January  2, 1994    Commission file number 1-5075

                                       OR

   [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
         SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

   For the transition period from _________ to _________

                                    EG&G, Inc.                    
             ---------------------------------------------------- 
            (Exact name of registrant as specified in its charter)

            Massachusetts                                04-2052042     
     ------------------------------                    --------------- 
    (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                  Identification No.)

    45 William Street, Wellesley, Massachusetts              02181
    -------------------------------------------             --------
    (Address of Principal Executive Offices)              (Zip Code)

    Registrant's telephone number, including area code (617) 237-5100


















    Securities registered pursuant to Section 12(b) of the Act:
                    
    Title of Each Class              Name of Each Exchange on Which Registered
    -------------------              -----------------------------------------

    Common Stock, $1 Par Value               New York Stock Exchange, Inc.
    --------------------------               -----------------------------
    Preferred Share Purchase Rights          New York Stock Exchange, Inc.
    -------------------------------          -----------------------------

    Securities registered pursuant to Section 12(g) of the Act:  NONE

    Indicate by check mark whether the registrant: (1) has filed all reports
    required to be filed by  section 13 or 15(d) of the  Securities Exchange
    Act  of 1934 during the preceding 12  months (or for such shorter period
    that the  registrant was required  to file such  reports),  and  (2) has
    been  subject to such  filing requirements for the past 90 days. Yes [X]
    No [ ]
 
    Indicate  by check mark if  disclosure of delinquent  filers pursuant to
    Item 405  of Regulation  S-K is  not contained herein,  and will  not be
    contained, to the best of registrant's knowledge, in definitive proxy or
    information statements  incorporated by  reference in  Part III of  this
    Form 10-K or any amendment to this Form 10-K. [ ]

    The aggregate  market value of the  common stock, $1 par  value, held by
    non-affiliates   of   the   registrant   on  February   25,   1994,  was
    $1,004,884,329.

    As of February 25,  1994, there were outstanding, exclusive  of treasury
    shares, 55,823,147 shares of common stock, $1 par value.


                       DOCUMENTS INCORPORATED BY REFERENCE

  PORTIONS OF EG&G, INC.'S
  1994 PROXY STATEMENT .  . . . . . .  . . . PART III (Items 10, 11 and 12)

 
<PAGE>
 


                                     PART I



   ITEM 1. BUSINESS
   ----------------

   General Business Description
   ----------------------------

         EG&G, Inc. was incorporated under the laws of the Commonwealth of
   Massachusetts in 1947.  EG&G, Inc. and its subsidiaries (hereafter
   referred to as "EG&G", the "Company", or the "Registrant") is a
   diversified company with annual sales of $2.7 billion.  

         The Company provides systems engineering and test site operating
   and management services to government agencies and laboratories.  It
   also designs and manufactures a variety of analytical and clinical
   instruments and mechanical and optoelectronic components for
   governmental and commercial customers.

         The Company's operations are classified into five industry
   segments:  Technical Services, Department of Energy ("DOE") Support,
   Instruments, Mechanical Components and Optoelectronics.


   Recent Developments
   -------------------

         In June 1993, the Company acquired the Wallac Group, a unit of
   Procordia AB, for approximately U.S. $46 million.  Wallac, headquartered
   in Finland, has 500 employees located in Scandinavia, Russia, the United
   Kingdom and North America.  It develops, manufactures and markets
   analytical and immunodiagnostic systems, instruments and reagents for
   clinical diagnostics, life-science research and environmental
   monitoring.

         Also in June 1993, the Company signed a 27 month joint research
   and development agreement with the Institute of Microelectronics
   National University of Singapore to develop a commercially viable
   micromachined accelerometer, an electronic sensor that triggers the
   deployment of vehicle airbags, for automotive and industrial use.  

         In October 1993, the Company was notified that it had been
   selected to continue as Base Operations Contractor at the Kennedy Space
   Center.  The cost-plus-award/incentive fee contract is for four years with
   two renewal option periods of three years each at the election of the
   government.  The proposed contract cost is approximately $1.7 billion
   over the life of the contract including renewals. 

         In October 1993, the Board of Directors authorized the purchase of
   up to a total of 5.5 million shares of the Company's common stock by the
   Company which will be accomplished through periodic purchases on the
   open market.  
 
<PAGE>
 

         In February 1994, the Company formed EG&G Environmental, Inc. to
   provide environmental services and systems management.


   Industry Segments
   -----------------

         In January 1994, the Company reorganized its operating
   organization and redefined its reporting segments. 

         A Mechanical Components segment was formed that includes all
   operations previously a part of the former Aerospace segment and all
   mechanical seal and blower operations previously a part of the former
   Components segment.  An Optoelectronics segment was also formed
   comprising all Optoelectronics divisions from the former Components
   segment, the Electronic Components Division and Power Systems both from
   the former Defense segment.  The composition of the Instruments and DOE
   Support segments remains essentially unchanged.  The Technical Services
   segment has been enlarged to include the service organizations of the
   former Defense segment.

         As a result of these changes, the Company's external reporting
   segments now correspond to its internal operating organization.


   Technical Services

         The Company provides a wide range of technical services including
   engineering, scientific, and technical support to a number of
   governmental organizations.  It also provides analysis and testing
   services to the automotive industry. 

         The Company has been the Base Operations Contractor for NASA's
   Kennedy Space Center in Florida since 1983. The Company manages the
   Center's facilities, tests astronaut rescue procedures and escape
   systems, provides security, fire protection and medical services,
   handles propellant commodities and manages the shuttle landing
   facility.  The current contract was awarded in October 1993 for a term
   of four years with two renewal options of three years each at the
   election of the government.

         The Company also supplies maintenance and support services to
   NASA's Langley Research Center in Virginia for the development of
   aircraft and spacecraft systems.

         The Company runs the U.S. Customs Service Support Seized Property
   Program, involving the management and disposal of all types of personal
   and real property.  It also provides perimeter and transit-system safety
   and security systems for U.S. government agencies. 

<PAGE>
 

         The Company provides technical support services to the Army's Yuma
   Proving Grounds including testing of vehicles, artillery, aircraft  
   armaments and airborne missile systems as well as providing optical and
   radar systems support.  The Company operates and maintains the U.S. Air
   Force Radar Target Scatter facility, an electromagnetic laboratory for
   static radar cross-section measurements.  The Company also furnishes
   technical services for the operation and calibration of high-power
   lasers and operational field-testing and evaluation of weapons systems.

        Work for the U.S. Department of Defense ("DoD") includes planning
   and analysis, training, engineering and other support services to the
   Navy in connection with next-generation combat systems for surface
   vessels and submarines; supporting major Navy submarine and surface ship
   programs with emphasis on improving the operational performance of
   electronic systems, developing new surveillance radars and sonar-based
   anti-submarine warfare systems; and developing systems used to evaluate
   the electronic warfare effectiveness of command, control, and
   communication systems in an electromagnetic environment.

         The Company is the management and operations contractor for the
   chemical weapons demilitarization program at the Army's Tooele Depot in
   Utah.  The Company's responsibilities include the construction and
   operation of a facility for the disposal of lethal chemical agents and
   munitions.
            
         Under a contract with the Army, the Company furnishes specialized
   operational and maintenance services for the Chemical Decontamination
   Training Facility at Fort McClellan, Alabama.  

         The Company conducts research on benign technologies for the
   extraction, conversion, and utilization of coal, oil, and gas for the
   DOE's Morgantown Energy Technology Center in West Virginia. The current
   contract covers work to be performed through September 1994.  

         The Company is managing the closedown of operations at the DOE's
   Superconducting Super Collider Laboratory project near Dallas, Texas.  

         The Company develops and conducts mobile and stationary vehicle
   durability testing and comprehensive vehicle component testing for the
   automotive industry.  It also tests fuels and lubricants for petroleum
   and chemical-additive industries to determine how these materials
   perform against industry and government standards.


   Department of Energy Support

         The Company provides site and environmental management, design,
   engineering and fabrication of equipment and other engineering and
   research services for the DOE.
 
<PAGE>
 

         The work, which is performed under five prime contracts with the
   DOE, includes engineering services in support of nuclear weapons
   testing, radiation sensing, the operation of precision switching devices
   and precision machining, research on reactor safety and nuclear waste
   management. 

         Uncertainty continues to exist in the DOE Support segment due to
   changes in government budget and national priorities.  The Department of
   Energy's rules concerning contractor liability and performance
   evaluation currently apply to all five contracts.  These new performance
   evaluation criteria create greater variability in the incentive awards
   earned.  The contractor liability rules provide for increased contractor
   accountability for costs associated with events determined to have been 
   avoidable.  This liability is generally limited to the fee earned in the
   grading period in which the avoidable event occurs.  In addition, the
   Department of Energy has announced its intention to proceed with a
   contract reform initiative.  

         Under the Rocky Flats contract, the Company is the management and
   operations contractor for the Rocky Flats facility near Golden,
   Colorado.  The Company provides the management, operation, and
   maintenance of government facilities capable of producing nuclear
   weapons components.  The Company also provides all support services at
   the site.  In addition, the Company manages DOE programs related to
   environmental restoration, waste management, and technology development. 
   The current contract expires at the end of December 1995.

         Under the Idaho National Engineering Laboratory ("INEL") contract,
   the Company is the management and operations contractor for certain
   government-owned facilities at INEL.  The Company is responsible for
   equipment and systems development in the fields of reactor physics,
   reactor safety technology, heat transfer, materials and nuclear waste
   management; and safety research on magnetic fusion, energy conservation,
   and geothermal and other non-nuclear energy sources.  It conducts
   research, development, and testing for reactor safety programs and
   provides support for the entire site.  The current contract expires in
   October 1994.  The Company has submitted a proposal in partnership with
   BNFL, Inc., a subsidiary of British Nuclear Fuels, plc, and Fluor
   Daniels Environmental Services, Inc., a subsidiary of Fluor Daniel,
   Inc., for increased work scope at the facility.  A decision on the
   awarding of the contract is expected in mid-1994. 

         Under the Energy Measurements contract, the Company provides
   scientific and engineering services for the DOE's underground nuclear
   weapons test program at the Nevada Test Site.  Much of this work is done
   in cooperation with the Sandia, Los Alamos, and Lawrence Livermore
   national research laboratories.  The primary work requires the
   measurement of energy from underground nuclear detonations.  Besides
   this mission, the Company works on many of DOE's non-weapons programs. 
   It conducts aerial radiation and environmental surveys nationwide and
   maintains a staff of experts to provide assistance in the event of a
   nuclear emergency anywhere in the world.  The current contract expires
   at the end of December 1995. 

<PAGE>
 

         Under the Reynolds Electrical and Engineering Co. contract, the
   Company provides specialized support and maintenance services also
   relating to the DOE's underground nuclear weapons test program at the
   Nevada Test Site.  This work includes construction services at the
   Tonopah Test Range and surface testing and drilling at the Yucca
   Mountain Project.  The current contract expires at the end of 
   December, 1995.  

         The United States has implemented a moratorium on nuclear weapons
   testing scheduled to last through September 1995 and the
   Administration has proposed a permanent ban on nuclear weapons testing. 
   The DOE is maintaining a capability to resume weapons testing if a
   decision to do so should be made.  However, during the moratorium, all 
   test-related activities have been stopped or reduced significantly. 
   Other activities at the Nevada Test Site, such as environmental
   monitoring and remediation, have increased, but have not offset the
   reduction in the testing programs.

         Under the Mound Applied Technologies contract, the Company is the
   management and operations contractor for the Mound facility in
   Miamisburg, Ohio.  The Mound facility is in the midst of a transition
   from defense programs to environmental restoration and economic
   development activities.  The Company's responsibilities include
   research, development, and production of high-technology mechanical
   explosives and electrical components for nuclear weapons.  The current
   contract expires at the end of September 1996.


   Instruments

         The Company offers instruments and systems for applications in
   medical and clinical diagnostics; biochemical, medical and life science
   research; environmental monitoring; industrial and pharmaceutical
   process measurement; gas and oil field applications; airport and
   industrial security; and marine and oceanographic studies.

         Many of the Company's instruments are based on the Company's
   expertise in nuclear measurements, including detection, characterization
   and measurement of radiation. For example, the Company offers alpha,
   beta and gamma counting systems that are used in clinical laboratories,
   research laboratories, and for environmental analysis.  A complete line
   of radiation protection measuring systems equipped with built-in large-
   area proportional detectors are sold to laboratories, nuclear and
   environmental monitoring facilities. 

         For research and environmental applications, the Company offers
   radiation detectors and associated electronic processing equipment
   ranging from discrete modular instruments to complete systems. Many of
   these instruments are based on the Company's hyperpure germanium crystal
   and silicon-based detector technologies.  Examples of such products are
   germanium detectors, charged particle detectors, multichannel analyzers,
   and electronic instrumentation modules.  These products are used by
   university, industrial, and government laboratories to study various
   nuclear phenomena. 

<PAGE>
 

         Employing its radioisotopic measurement technology, the Company
   offers industrial on-line level and density measuring instruments for
   process control of liquids, slurries, or solids in containers, tanks,
   and pipes.

         Instruments based on the Company's expertise in detecting and
   characterizing electromagnetic radiation, including infrared, visible,
   and ultraviolet light, and  microwave, x-rays, and gamma rays, include
   optical analyzers and Raman spectrometers that are used extensively in
   materials research and development.  Extensions of these product lines
   are used to characterize the performance of fiber optics and for the
   non-destructive analysis of materials and surfaces.  The Company offers
   clinical laboratory instruments based on the luminescence of biological
   chemicals and immunoassay products that use the Company's proprietary
   time-resolved fluorescence technology.  The Company also offers x-ray
   security inspection systems and walk-through metal detectors for
   industry, airline, and commercial use, and microwave-based moisture
   detection systems used in process control and in-line analysis of bulk
   materials.  The Company has recently developed food inspection systems
   which combine imaging technology developed for its optical analyzers
   with the x-ray technology employed by the Company in its security
   systems business.

         The Company's high-performance electrochemistry instruments, the
   majority of which are computer controlled, are used by research
   laboratories, universities and industrial and pharmaceutical companies
   to detect, analyze, and characterize corrosion, trace materials and
   neurological biochemicals. 

         The Company offers small high-precision turbine flow meters and
   primary standard flow calibrators that are used in aerospace, industrial
   and pharmaceutical applications. 

         For marine and oceanographic applications, the Company offers
   side-scan sonar equipment, marine seismic instruments,  and acoustic
   equipment for recovery of ocean-floor moorings and instruments, and it
   provides instruments for use in the oil and gas industry including high-
   temperature, high-pressure test chambers that predict performance of
   cement slurries during drilling and completion of oil and gas wells,
   viscometers for analyzing drilling muds, pressure calibration standards,
   and chromatographs and gravitometers for the analysis of natural gas.


   Mechanical Components 

         The Company offers high reliability advanced seals and bellows
   products, fans and blowers, precision components for aerospace
   applications and heat management devices.

         The Company produces bellows used in mechanical sealing components
   and systems for the containment and control of fluids.  These products
   are used by the oil, petrochemical, chemical, food processing, pulp and
   paper, waste water treatment and refrigeration industries. 

<PAGE>
 


         The Company's mechanical face-type bellows seals, engineered
   sealing products, and bellows devices  are utilized in jet aircraft,
   surface ships, submarines, torpedoes, weapons, medical equipment,
   computer equipment and power generation equipment.

         The Company manufactures solenoid and pressure operated valves for
   aerospace and other applications primarily to control turbines, rocket
   engines and aircraft and space systems. 

         The Company manufactures high-reliability cooling fans and blowers
   for electronics and electrical equipment and transportation systems, and
   blowers and blower systems that produce both vacuum and pressure using
   regeneration and multistage technology for industrial applications.  
   The Company's BiocubeTM Aerobic Biofilter treats volatile organic
   compounds and odorous emissions with naturally occurring microbes.  

         The Company manufactures aircraft engine exhaust and pneumatic
   ducting assemblies and rocket engine components that utilize bulge
   forming, drop hammer forming and fusion welding technologies.

         The Company's metal printed circuit board retainers and extractors
   are used in electronic enclosures for military, commercial aircraft,
   telecommunications and computer applications. 


   Optoelectronics 

         The Company offers a broad variety of components that emit and
   detect light in the spectrum from ultraviolet through visible to the far
   infrared.  These components are used in many applications ranging from
   simple light sensors used in automotive and commercial electronics to
   sophisticated space-qualified detectors that are used for communications
   and remote sensing of the earth and planetary exploration.

         Examples of commercial and consumer applications of the Company's
   optical sensors include medical instruments, smoke detectors, cameras,
   bar-code scanners and automatic headlight dimmers.  The Company's high
   performance image sensors have applications in aerospace, astronomy,
   spectroscopy and medical and industrial imaging.

         The Company also offers a wide variety of flashlamps for use in
   photocopy and reprographic equipment, phototypesetting systems, beacons
   and in laser systems and accessories.  TV camera tubes, the main
   component in x-ray diagnostic equipment, are supplied to manufacturers
   of medical imaging instruments.  Pyroelectric infrared and thermopile
   sensors are used in security systems, temperature monitoring and, in
   combination with photo resistors, for automatic light switches.

         The Company offers hermetically-sealed ceramic-to-metal switching
   devices used for pulsed radar and gas and liquid lasers.  Spark gaps are
   offered for use in lithotripters which alleviate kidney stones non-
   invasively and in high-performance lasers such as those used in  laser
   range finders.  Similar and related products are used by the military
   for missile and rocket firing and control.  The Company also offers
 
<PAGE>
 

   rubidium atomic frequency standards for both military and commercial
   navigation and communication systems and high-reliability and high-
   frequency power supplies that provide precise power conditioning in
   electronic equipment used by the military and in commercial aircraft and
   air traffic control systems.


   Marketing
   ---------

         The services and products of the Company are marketed through its
   own specialized sales forces as well as independent foreign and domestic
   manufacturers' representatives and distributors.  In certain foreign
   countries, the Company has entered into joint venture and license
   agreements with local firms to manufacture and market its products.


   Raw Materials and Supplies
   --------------------------

         Raw materials and supplies are generally readily available in
   adequate quantities from domestic and foreign sources.


   Patents and Trademarks
   ----------------------

         While the Company's patents, trademarks, and licenses are 
   cumulatively important to its business, the Company does not believe
   that the loss of any one or group of related patents, trademarks, or
   licenses would have a materially adverse effect on the overall business
   of the Company or on any of its business segments.


   Backlog
   -------

         The approximate dollar value of all unfilled orders by industry
   segment as of January 2, 1994, and January 3, l993, is set forth in 
   the table below.

<TABLE>
<CAPTION>
   (In Thousands)                      January 2, 1994      January 3, 1993
                                       ---------------      ---------------
  <S>                                      <C>                  <C>
   Technical Services                       $  243,081           $  219,092
   DOE Support                               1,154,505            1,294,456
   Instruments                                  47,452               45,276
   Mechanical Components                        92,691              114,454
   Optoelectronics                              83,459               95,897
                                            ----------           ----------
       Total                                $1,621,188           $1,769,175
                                            ==========           ==========
</TABLE>

    
<PAGE>
 

        At January 2, 1994, 85% of the total backlog represented orders
   received from U.S. Government agencies, primarily DOE.  The DOE Support
   backlog represents the annual funding for these contracts that has
   actually been appropriated.  The order backlog for each segment relates
   differently to future sales based on different business characteristics,
   primarily order and delivery lead times and customer demand requirements.  
   The Company estimates that approximately 96% of its current backlog will
   be billed during l994.


   Government Contracts 
   --------------------

        The Company's five major contracts are awarded on a
   cost-plus-award-fee basis.  Sales under these contracts were $1,379
   million in 1993.  The expiration dates for these contracts are, as
   follows, one in 1994, three in 1995 and one in 1996; funds are
   appropriated, work scopes are determined and fee pools are negotiated
   annually.  The INEL contract expires in October 1994 and the Company
   holds the majority interest in a joint venture that has submitted a
   proposal for increased work scope at the facility.  The Department of
   Energy's rules concerning contractor liability and performance
   evaluation currently apply to all five contracts.  These new performance
   evaluation criteria create greater variability in the incentive awards
   earned.  The contractor liability rules provide for increased contractor
   accountability for costs associated with events determined to have been
   avoidable.  This liability is generally limited to the fee earned in the
   grading period in which the avoidable event occurs.  In addition, the
   Department of Energy has announced its intention to proceed with a
   contract reform initiative.  Uncertainty continues to exist in the
   Company's  DOE Support segment due to changes in government budget and
   national priorities.  Sales to U.S. Government agencies, which were
   predominantly to the DOE, DoD and NASA, were $1,939 million, $2,035 million
   and $1,987 million in 1993, 1992 and 1991, respectively.
          
         The Company's Kennedy Space Center contract with NASA generated
   sales of $201 million in 1993.  In October 1993, the Company was
   selected by NASA to continue as the base operations contractor at the
   Kennedy Space Center.  The new award-fee contract has a potential term
   of ten years, including options, contains reductions in contract value
   and could result in reductions in annual fee.  

         In accordance with government regulations, all of the Company's
   government contracts are subject to termination for the convenience of
   the government.  
 
<PAGE>
 

   Competition  
   -----------

        Because of the wide range of its products and services, the
   Company faces many different types of competition and competitors. 
   Competitors range from large foreign and domestic organizations that
   produce a comprehensive array of goods and services, to small concerns
   producing a few goods or services for specialized market segments. 

         The Technical Services segment provides technical services to
   several agencies of the federal government, including DoD Departments
   and NASA.  This business is typically won through competition with a
   number of large and small government contractors, many of whom are as
   large or larger than the Company and who, therefore, have resources and 
   capabilities that are comparable to or greater than those of the
   Company.  The primary bases for competition in these markets are
   technical and management capabilities, current and past performance,
   and price.  Competition is typically subject to mandated procurement and
   competitive bidding requirements.  Competition for automotive testing
   services is primarily from a few specialized testing companies and from
   customer-owned testing facilities.  Automotive testing competition is
   primarily based on quality, service, and price.   

         In the DOE Support segment, the Company is subject to federally
   mandated procurement procedures, usually bidding competitively against a
   variety of large and small government contractors.  Whereas in the past
   the Company was occasionally granted a sole-source opportunity for this
   work, the Company anticipates that future business will be obtained
   through competitive bidding subject to DOE procurement procedures.  Some
   of the competitors in this segment are larger than the Company and
   therefore may have resources and capabilities that are comparable to or
   greater than those of the Company. 

         In the Instruments segment, the Company primarily competes with
   small specialized instrument companies that serve narrow segments of
   markets in oceanographic equipment; x-ray security systems; nuclear,
   industrial, diagnostic, clinical and oil and gas related instrumentation.  
   The Company competes in these markets on the basis of product performance,
   product reliability, service and price.  Consolidation of competitors
   through acquisitions and mergers and the Company's increasing activity
   in selected diagnostics and industrial markets will increase the
   proportion of large competitors in this segment.  

         In the Mechanical Components segment, the Company is a leading
   supplier of selected precision aircraft exhaust components, specialized
   fans and heat transfer devices, and mechanical seals for industrial
   applications.  Competition in these areas is typically from small
   specialized manufacturing companies. 
       
<PAGE>
 

          The Company is among the leading suppliers of specialty
   flashtubes, silicon photodetectors, avalanche photodiodes, cadmium
   sulfide and cadmium selenide detectors, photodiode arrays and switched
   power supplies, all of which are part of the Company's Optoelectronics
   segment.  Typically, competition is from small specialized manufacturing
   companies.  

          Within both the Mechanical Components and Optoelectronics
   segments, competition for governmental purchases is subject to mandated
   procurement procedures and competitive bidding practices.  In both of
   these segments, the Company competes on the basis of product
   performance, quality, service and price.  In much of the Optoelectronics
   segment and in the specialized fan and aircraft and marine mechanical
   seal markets included in the Mechanical Components segment, advancing
   technology and research and development are important competitive
   factors. 
 

   Research and Development
   ------------------------

        During 1993, 1992 and 1991, Company-sponsored research and
  development expenditures were approximately $34.7 million, $32.1 million
  and $24.7 million, respectively. Customer-sponsored research and
  development, primarily for Department of Energy programs, accounted for
  additional expenditures of approximately $137 million in 1993, $133
  million in 1992 and $127 million in 1991. 


   Environmental Compliance  
   ------------------------

      The Company is conducting a number of environmental investigations and
  remedial actions at current and former Company locations and, along with other
  companies, has been named a potentially responsible party for certain waste
  disposal sites. The Company accrues for environmental issues in the accounting
  period in which the Company's responsibility is established and the cost can
  be reasonably estimated.  There have been no environmental matters to date
  which had or are expected to have a material effect on the Company's financial
  position or results of operations.   

        The Company's compliance with the laws, rules and regulations relating
  to the protection of the environment has not had, and is not expected to have,
  a material adverse effect on its capital expenditures, earnings or competitive
  position.

           
  Employees
  ---------

      As of March 17, l994, the Company employed approximately 32,000 persons. 
  Certain of the Company's subsidiaries are parties to contracts with labor
  unions.  The Company considers its relations with employees to be
  satisfactory. 

<PAGE>
 

  Financial Information About Industry Segments
  ---------------------------------------------

<TABLE>
<CAPTION>  
  Sales and Income From Operations by Industry Segment
  For the Five Years Ended January 2, 1994

  (In thousands)                 1993        1992        1991       1990        1989 
                           ----------  ----------  ---------- ----------  ---------- 
    <S>                   <C>         <C>         <C>        <C>         <C>    
  Sales:
     Technical Services    $  636,041  $  608,864  $  586,537 $  522,724  $  486,633 
     DOE Support            1,378,532   1,468,741   1,430,016  1,318,329     592,807 
     Instruments              237,223     226,900     230,196    208,263     165,169 
     Mechanical Components    244,878     274,199     295,519    295,052     271,707 
     Optoelectronics          201,274     210,118     146,274    129,920     133,842 
                           ----------  ----------  ---------- ----------  ---------- 
       Total               $2,697,948  $2,788,822  $2,688,542 $2,474,288  $1,650,158 
                           ==========  ==========  ========== ==========  ========== 

  Income from Operations:
     Technical Services    $   65,498  $   54,173  $   53,296 $   45,246  $   44,655 
     DOE Support               38,383      59,112      44,403     42,403      27,190 
     Instruments               10,119      15,764      21,125      5,917      11,915 
     Mechanical Components     23,554      20,934      27,239     26,120      28,699 
     Optoelectronics           10,866       3,070       6,588     11,517       8,767 
     General Corporate 
       Expenses               (27,573)    (29,895)    (27,456)   (23,491)    (22,833)
                           ----------  ----------  ---------- ----------  ---------- 
       Total               $  120,847  $  123,158  $  125,195 $  107,712  $   98,393 
                           ==========  ==========  ========== ==========  ========== 
</TABLE>

        The Company's operations are classified into five industry segments: 
  Technical Services, DOE Support, Instruments, Mechanical Components and
  Optoelectronics. The Company has changed the way its products and services 
  are grouped into industry segments to better reflect the markets served 
  and the Company's strategies for the future.  Data for prior periods have 
  been restated accordingly.
  
<PAGE>
 


<TABLE>
<CAPTION>
        Additional information relating to the Company's operations in the
  various industry segments follows:
                                             
                                 Depreciation and                 Capital          
   (In thousands)              Amortization Expense             Expenditures
                            -------------------------     -------------------------
                               1993     1992     1991        1993     1992     1991
                            -------  -------  -------     -------  -------  -------
   <S>                     <C>      <C>      <C>         <C>      <C>      <C>  
    Technical Services      $ 8,422  $ 7,991  $ 7,653     $ 6,315  $ 5,650  $ 4,974
    DOE Support                  -        -        -           -        -        -     
    Instruments               9,213    8,131    8,425       6,555    4,768    6,276
    Mechanical Components     6,870    7,755    8,643       5,598    5,290    9,606
    Optoelectronics          12,417   11,595    8,189       8,469    6,305    4,708
    Corporate                   920      820      816         923      433    1,053
                            -------  -------  -------     -------  -------  -------
                            $37,842  $36,292  $33,726     $27,860  $22,446  $26,617
                            =======  =======  =======     =======  =======  =======
 <CAPTION>               
   (In thousands)             Identifiable Assets    
                           --------------------------
                               1993     1992     1991
                           -------- -------- --------
   <S>                    <C>      <C>      <C> 
    Technical Services     $127,917 $133,351 $131,931
    DOE Support              11,959   22,189   17,171
    Instruments             256,117  217,792  215,029
    Mechanical Components    97,317  112,272  133,404
    Optoelectronics         142,630  142,543   90,577
    Corporate               132,868  121,593  109,785
                           -------- -------- --------
                           $768,808 $749,740 $697,897
                           ======== ======== ========
</TABLE>

        DOE Support's identifiable assets mainly represent accounts receivable
  for fees from the U.S. Department of Energy. DOE Support's assets do not
  include U.S. Government funds and facilities that are devoted to the contracts
  and for which the Company is custodian. Corporate assets consist primarily of
  cash and cash equivalents, prepaid taxes and investments.
 
<PAGE>
 

  Financial Information About Geographic Areas
  --------------------------------------------

<TABLE>
<CAPTION>
  Information relating to geographic areas follows:

  (In thousands)                   Sales                  Income From Operations              
                     --------------------------------   --------------------------  
                           1993       1992       1991       1993     1992     1991 
                     ---------- ---------- ----------   -------- -------- -------- 
   <S>              <C>        <C>        <C>          <C>      <C>      <C>
    U.S.             $2,427,663 $2,532,494 $2,484,972   $129,858 $142,272 $137,346 
    Non-U.S.            270,285    256,328    203,570     18,562   10,781   15,305 
    Corporate                 -          -          -    (27,573) (29,895) (27,456)
                     ---------- ---------- ----------   -------- -------- -------- 
                     $2,697,948 $2,788,822 $2,688,542   $120,847 $123,158 $125,195 
                     ========== ========== ==========   ======== ======== ======== 

<CAPTION>
    (In thousands)          Identifiable Assets                                                      
                       ----------------------------
                           1993      1992      1991
                       --------  --------  --------
   <S>                <C>       <C>       <C>
    U.S.               $317,303  $355,722  $364,990
    Non-U.S.            318,637   272,425   223,122
    Corporate           132,868   121,593   109,785
                       --------  --------  --------
                       $768,808  $749,740  $697,897
                       ========  ========  ========
</TABLE>

       Over 60% of the identifiable assets of the non-U.S. operations are 
  located in European Community countries.  Transfers between geographic 
  areas were not material.



 
 ITEM 2.   PROPERTIES
  --------------------

        The Company occupies approximately 5,789,700 square feet of building
  area, of which approximately 1,768,400 square feet is owned and the balance
  leased.  The Company's headquarters occupies 53,350 square feet of leased
  space in Wellesley, Massachusetts.  The Company's other operations are
  conducted in manufacturing and assembly plants, research laboratories,
  administrative offices and other facilities located in 27 states,
  Washington, D.C., Puerto Rico, the Virgin Islands and 24 foreign
  countries.

        Non-U.S. facilities account for approximately 1,278,600 square feet of
  owned and leased property, or approximately 22% percent of the Company's total
  occupied space.

        The Company's leases on property are both short-term and long-term.  In
  management's opinion, the Company's properties are well-maintained and are
  adequate for its present requirements.  Future space requirements are 

<PAGE>
 


  anticipated and appropriate facility plans will be implemented to meet those
  requirements.

       At certain government facilities, the Company occupies government
  furnished space.  In addition, a substantial part of the equipment and
  machinery used by the Company in the performance of its government contracts
  has been furnished by the government.  Substantially all of the machinery and
  equipment used by the Company in its other activities is owned by the Company
  and the balance is leased or furnished by contractors or customers.

       The following table indicates the approximate square footage of  real
  property owned and leased attributable to each of the Company's industry
  segments.

<TABLE>
<CAPTION>                                                                                   
                                 Property       Property
                                    Owned         Leased          Total
                               (Sq. Feet)     (Sq. Feet)     (Sq. Feet)
                               ----------     ----------     ----------
 <S>                             <C>          <C>            <C>
  Technical Services              163,400      1,003,600      1,167,000
  DOE Support                           0      1,527,600      1,527,600
  Instruments                     633,600        397,200      1,030,800
  Mechanical Components           574,300        551,100      1,125,400
  Optoelectronics                 397,100        476,600        873,700
  Corporate Offices                     0         65,200         65,200
                                ---------      ---------      ---------
  Totals                        1,768,400      4,021,300      5,789,700
                                =========      =========      =========
</TABLE>



  ITEM 3.  LEGAL PROCEEDINGS
  --------------------------

      The Company is subject to various investigations, claims, and legal
  proceedings covering a wide range of matters that arise in the ordinary course
  of its business activities.  Each of these matters is subject to various
  uncertainties, and it is possible that some of these matters may be resolved
  unfavorably to the Company.  The Company has established accruals for matters
  that are probable and reasonably estimable.  Management believes that any
  liability that may ultimately result from the resolution of these matters in
  excess of amounts provided will not have a material adverse effect on the
  financial position or results of operations of the Company.



  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  ------------------------------------------------------------

      Not applicable. 

<PAGE>
 



                                     PART II



  ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
  ------------------------------------------------------------------------------

<TABLE>
<CAPTION>
  Quarterly Common Stock Market Price Range
  -----------------------------------------

                            1992 Quarters                     1993 Quarters        
                    ------------------------------    ------------------------------
  Price              First  Second   Third  Fourth     First  Second   Third  Fourth
  -----             ------  ------  ------  ------    ------  ------  ------  ------
 <S>               <C>     <C>     <C>     <C>       <C>     <C>     <C>     <C> 
  High              $26.75  $26.31  $24.75  $21.88    $24.00  $24.50  $20.25  $18.38
  Low                24.06   21.25   21.13   18.00     19.38   18.88   15.75   16.75

<CAPTION>
  Dividends
  ---------
                            1992 Quarters                     1993 Quarters        
                    ------------------------------    -----------------------------
                     First  Second   Third  Fourth     First  Second   Third Fourth
                    ------  ------  ------  ------    ------  ------  ------ ------
 <S>               <C>     <C>     <C>     <C>       <C>     <C>     <C>    <C> 
  Cash Dividends 
    Per Common 
    Share           $ .115  $ .125  $ .125  $ .125    $  .13  $  .13  $  .13  $ .13

</TABLE>


        The Company's common stock is listed and traded on the New York Stock
  Exchange.  The number of holders of record of the Company's Common Stock as of
  February 25, 1994, was approximately 15,712.  

        In October l993 the Board of Directors of the Company voted an increase
  in the Company's quarterly cash dividend from thirteen cents to fourteen cents
  per share.  The quarterly cash dividend was paid on February 10, l994, to
  stockholders of record at the close of business on January 21, l994. 

<PAGE>
 



   ITEM 6.  SELECTED FINANCIAL DATA  
   --------------------------------

<TABLE>
<CAPTION>

   SELECTED FINANCIAL INFORMATION  For the Five Years Ended January 2, 1994

      (In thousands where applicable)      1993        1992        1991        1990        1989 
                                     ----------  ----------  ----------  ----------  ---------- 
     <S>                            <C>         <C>         <C>         <C>         <C>     
      Operations:
         Sales                       $2,697,948  $2,788,822  $2,688,542  $2,474,288  $1,650,158 
         Income From Operations         120,847     123,158     125,195     107,712      98,393 
         Income Before Cumulative
           Effect of Accounting
           Changes                       79,571      87,779      81,242      73,966      69,850 
         Net Income                      59,071*     87,779      81,242      73,966      69,850 
         Earnings Per Share Before
           Cumulative Effect of
           Accounting Changes              1.41        1.56        1.45        1.30        1.20 
         Earnings Per Share                1.05*       1.56        1.45        1.30        1.20 
         Return On Equity Before
           Cumulative Effect of
           Accounting Changes              16.4%       19.6%       20.6%       20.6%       20.5%
         Return On Equity                  12.4%*      19.6%       20.6%       20.6%       20.5%
         Weighted Average Shares
           Outstanding                   56,504      56,385      55,901      56,989      58,262 

      Financial Position:
         Working Capital              $ 227,935  $  247,518  $  214,495  $  149,674  $  151,187 
         Current Ratio                   1.96:1      2.05:1      1.89:1      1.58:1      1.59:1 
         Total Assets                   768,808     749,740     697,897     675,224     643,403 
         Total Debt                      45,039      42,223      59,635      95,551     113,390 
         Stockholders' Equity           477,534     473,636     420,711     369,631     348,987 
          - Per Share                      8.51        8.34        7.45        6.58        6.02 
         Total Debt/Total Capital             9%          8%         12%         21%         25%
         Shares Outstanding              56,131      56,812      56,495      56,175      57,993 

      Other Data:
         Cash Flows From 
           Operating Activities       $ 112,137  $  127,807  $  104,429  $  129,208  $   52,414 
         Capital Expenditures            27,860      22,446      26,617      19,848      23,258 
         Depreciation and 
           Amortization                  37,842      36,292      33,726      29,944      25,536 
         Cash Dividends Per 
           Common Share                     .52         .49         .42         .38         .34 

<FN>
      *Includes one-time after-tax charges of $20.5 million, or $.36 per share, due to the
      Company's adoption of SFAS Nos. 106 and 109.  
</TABLE>


<PAGE>
 


   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
   ------------------------------------------------------------------------     
   RESULTS OF OPERATIONS
   ---------------------


   Results of Operations
   ---------------------

        The discussion that follows is a summary analysis of the major changes
   by industry segment.


   1993 Compared to 1992 

   Sales
           
   Sales for 1993 were $2,698 million, $91 million below 1992 sales of $2,789
   million.   

   Technical Services:  The $27 million increase resulted from an increase of
   $24 million in automotive testing services caused primarily by the
   introduction of new industry testing protocols, partially offset by a $10
   million reduction in contract billings at the Kennedy Space Center.  

   DOE Support:  The majority of the $90 million decrease resulted from a lower
   program scope at Rocky Flats and the impact of the moratorium on nuclear
   testing on Energy Measurements.  The shift in sales and related cost of sales
   from products to services presented in the Consolidated Statement of Income
   reflects the change, compared to 1992, from production to environmental
   restoration services at some facilities.  

   Instruments:  The $10 million increase resulted from the $43 million sales 
   of Wallac acquired in June 1993, partially offset by reduced scientific,
   industrial and security instruments sales due to sluggish market conditions,
   lower foreign exchange rates and large orders shipped in 1992. 

   Mechanical Components:  The $29 million decrease was attributable to a $21
   million reduction in aerospace sales due primarily to continued softness in
   this market and, to a lesser extent, the divestiture of two operations.

   Optoelectronics:  The $9 million decrease was due mainly to the completion of
   several programs in 1992, partially offset by the sales of Heimann
   Optoelectronics acquired early in the second quarter of 1992.  


   Income From Operations

   Income from operations was $120.8 million in 1993, a 2% decrease from 1992.

   Technical Services:  The $11.3 million increase was due primarily to higher
   sales and improved margins in the automotive testing services business.  In 

<PAGE>
 

   October 1993, the Company was selected by NASA to continue as the base
   operations contractor at the Kennedy Space Center. The new contract has a
   potential term of 10 years, including options, contains reductions in 
   contract value and could result in reductions in annual fee of 
   approximately $5 million.  

   DOE Support:  Uncertainty continues to exist in the DOE Support segment due 
   to changes in government budgets and national priorities.  The $20.7 million
   decrease was primarily attributable to Rocky Flats which experienced lower
   grades and a reduction of available fee pool.  In addition, 1992 results
   included a favorable profit adjustment due to higher than anticipated
   performance grades at year-end 1991.  Lower grades on the Idaho contract also
   contributed, to a lesser extent, to the decrease. The Idaho contract expires
   in October 1994, and the Company is participating as the majority interest in
   a joint venture that has submitted a proposal for increased work scope at the
   facility.  The Department of Energy's rules concerning contractor liability
   and performance evaluation became effective for the remaining two contracts,
   REECo and Mound, in October 1993.  These rules, coupled with the Department 
   of Energy's announced intention to proceed with a contract reform initiative,
   create greater variability in the incentive awards earned and provide for
   increased contractor accountability. 
             
   Instruments:  The $5.6 million decrease resulted from lower sales of
   scientific, industrial and security instruments partially offset by the 
   income generated by the Wallac acquisition.  Management has initiated a 
   review to assess certain operating elements of this segment.  The  
   Instruments segment remains an integral part of the Company's long-term
   growth strategy.  

   Mechanical Components:  Improved profitability resulting from cost reduction
   programs in the industrial sealing and electromechanical businesses more than
   offset the impact of lower aerospace sales, generating a $2.6 million
   increase.

   Optoelectronics:  The $7.8 million increase was due to improved profitability
   as a result of cost reductions at Heimann Optoelectronics.  The 1992 results
   included a charge of $6.3 million for the write-down of the net assets of two
   businesses to their estimated disposal value. 

   General Corporate Expenses:  The $2.3 million decrease was due to the absence
   of corporate management incentives in 1993.    

        The net change in other income (expense) was an increase in income of
  $3.1 million.  This was primarily due to gains on investments.  The 1993
  effective tax rate of 34.7% is higher than the 27.5% in 1992 primarily because
  the 1992 rate reflected a favorable adjustment of prior estimated tax
  liabilities and the tax benefit resulting from the sale of an investment in a
  hydroelectric power plant.
             
        During the first quarter of 1993, the Company adopted Statement of
  Financial Accounting Standards (SFAS) No. 106 on accounting for postretirement
  benefits other than pensions for its U.S. retiree health benefits and SFAS No.
  109 on accounting for income taxes.  The adoption of SFAS No. 106 resulted in
  an after-tax charge of $13.2 million ($.23 per share) while the charge for 

<PAGE>
 


  SFAS No. 109 was $7.3 million ($.13 per share).  See Notes 13 and 16 for
  additional disclosures.

        The Company reduced its discount rate for employee benefit plans in 1993
  as a result of the decrease in long-term interest rates.  The effects of the
  lower discount rates were partially offset by corresponding reductions in
  assumptions for compensation increases and health care cost trend rates.  The
  net results of these changes will not materially affect the Company's results
  of operations.


  1992 Compared to 1991

  Sales

  1992 sales of $2,789 million were $100 million higher than the $2,689 million
  achieved in 1991.  

  Technical Services:  The increase of $22 million was generated by higher sales
  levels under various government contracts.  

  DOE Support:  Sales increased $39 million due to higher program scopes at most
  of the operations.  

  Instruments:  Sales decreased $3 million from lower security and industrial
  instruments sales that were partially offset by higher scientific instruments
  sales.  

  Mechanical Components:   The $21 million decrease resulted from $14 million
  lower sales in the aerospace business due primarily to general softness in the
  market and, to a lesser extent, from a 1991 divestiture.  

  Optoelectronics:  The sales of Heimann Optoelectronics acquired early in the
  second quarter of 1992 were the main contributor to the  $64 million increase.


  Income From Operations

  Income from operations was $123.2 million in 1992, a decrease of $2 million
  from the 1991 level.  

  Technical Services:  The $0.9 million increase was generated by the margin on
  increased government sales offset by lower margins in the automotive testing
  business caused by slightly lower sales and costs associated with follow-on
  test programs.  

  DOE Support:  All operations contributed to the $14.7 million increase, the
  majority of which was due to higher award fee pools, with the largest increase
  at the Rocky Flats facility.   

<PAGE>
 


  Instruments:  The $5.4 million decrease was due to lower sales and changes in
  sales mix for security and industrial instruments as well as lower security
  instruments margins caused by competitive pricing pressures; these decreases
  were partially offset by improved margins and higher volume on scientific
  instruments.  

  Mechanical Components:   Income decreased $6.3 million, resulting from cost
  inefficiencies and product mix in the industrial sealing and electromechanical
  businesses and the profit impact of lower sales.  These decreases were
  partially offset by lower costs in Europe in 1992 and general productivity
  improvements in the aerospace business.  The 1991 results included charges for
  environmental cleanup costs.

  Optoelectronics:   Income decreased $3.5 million.  The 1992 results included a
  $6.3 million charge to write-down two businesses' net assets, including
  goodwill, to their estimated disposal value.  This write-down was included in
  general and administrative expense.  Higher costs and manufacturing
  inefficiencies at an operation also contributed to the decrease.  Partially 
  offsetting the decreases were improved margins at some operations.  The 1991
  results included program cost write-offs.

  General Corporate Expenses:  The $2.4 million increase was due to increased
  training and business development expenses as well as normal cost increases in
  1992, partially offset by reduced management incentives.   

        The net change in other income (expense) was a decrease in expense of
  $2.8 million due primarily to lower interest expense. The decrease in the
  effective tax rate from 32.5% in 1991 to 27.5% in 1992 reflected a tax benefit
  resulting from the sale of an investment in a hydroelectric power plant and a
  higher favorable adjustment of prior estimated tax liabilities in 1992.


  Financial Condition
  -------------------

        The Company's cash and cash equivalents increased $2.4 million to $72.2
  million at the end of 1993 while total debt increased $2.8 million to $45
  million. During the second quarter of 1993, the Company acquired Wallac for
  net cash of $33.8 million and a one-year note for $5.4  million. Cash flows
  from operating activities totaled $112.1 million in 1993, $127.8 million in
  1992 and $104.4 million in 1991 and were principally used for capital
  expenditures, acquisitions, debt retirement and dividends.  In addition, the
  Company increased its purchases of common stock by one million shares in 1993.

        At the end of 1993, the Company had $34.9 million of commercial paper
  outstanding, an increase of $3 million over last year's balance. Commercial
  paper, which is the Company's principal source of borrowing, continues to be
  rated "A-1" by Standard & Poor's.  Moody's recently changed its rating to
  "Prime-2" from "Prime-1." The Company's commercial paper borrowing cost is not
  expected to increase significantly as a result of the rating change. Credit
  agreements, which are in the process of being restructured, total $300 million
  and serve as backup facilities. 
 
<PAGE>
 


        The Company invested $27.9 million in physical plant and equipment in
  1993 and expects to increase this level of investment to approximately $50
  million in 1994 to support new product development initiatives in the
  Instruments and Optoelectronics segments.  In October 1993, the Board of
  Directors authorized the purchase of up to a total of 5.5 million shares of
  the Company's common stock through periodic purchases on the open market. 
  During 1993, the Company purchased 1.1 million shares under this new program. 
  The Company, which is considering financing these activities with a
  combination of short-term and long-term debt and cash flows from operations,
  believes it can take these actions and retain the flexibility to maintain both
  its product development and growth strategies.


  Dividends  
  ---------

        In October 1993, the Board of Directors voted to increase the Company's
  quarterly cash dividend by 8% to 14 cents per share, beginning with the
  dividend payable in February 1994 and resulting in an annual rate of 56 cents
  per share for 1994. EG&G has paid cash dividends, without interruption, for 29
  years and has increased dividends each year since 1974. The Company continues
  to retain what management believes to be sufficient earnings to support the
  funding requirements of its planned growth. 

<PAGE>
 



 
 ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
  ----------------------------------------------------

<TABLE>
<CAPTION>

  CONSOLIDATED BALANCE SHEET - As of January 2, 1994 and January 3, 1993
      
  (Dollars in thousands except per share data)                 1993        1992 
                                                           --------    -------- 
 <S>                                                      <C>         <C>                    
  Current Assets:
     Cash and cash equivalents                             $ 72,185    $ 69,752 
     Accounts receivable (Note 3)                           237,609     261,859 
     Inventories (Note 4)                                   121,581     114,196 
     Other (Note 16)                                         33,657      36,988 
                                                           --------    -------- 
  Total Current Assets                                      465,032     482,795 
                                                           --------    -------- 
  Property, Plant and Equipment:
     At cost (Note 5)                                       327,416     301,931 
     Less - Accumulated depreciation and amortization       221,320     205,767 
                                                           --------    -------- 
  Net Property, Plant and Equipment                         106,096      96,164 
                                                           --------    -------- 
  Investments (Note 6)                                       25,920      26,660 
                                                           --------    -------- 
  Intangible and Other Assets (Notes 7 and 16)              171,760     144,121 
                                                           --------    -------- 
        Total Assets                                       $768,808    $749,740 
                                                           ========    ======== 

  Current Liabilities:
     Short-term debt (Note 8)                              $ 43,589    $ 40,267 
     Accounts payable                                        60,794      69,727 
     Accrued expenses (Note 9)                              132,714     125,283 
                                                           --------    -------- 
  Total Current Liabilities                                 237,097     235,277 
                                                           --------    -------- 
  Long-Term Liabilities (Notes 8 and 13)                     54,177      40,827 
                                                           --------    -------- 
  Contingencies (Note 10)                                         -           -   

  Stockholders' Equity (Note 11):
     Preferred stock - $1 par value, authorized                                 
       1,000,000 shares; none outstanding                         -           -                          
     Common stock - $1 par value, authorized 
       100,000,000 shares; issued 60,102,000 shares          60,102      60,102 
     Capital in excess of par value                               -           -   
     Retained earnings                                      496,063     473,262 
     Cumulative translation adjustments (Note 1)             (8,287)     (1,323)
                                                           --------    -------- 
                                                            547,878     532,041 
      
<PAGE>
 

<CAPTION>
     CONSOLIDATED BALANCE SHEET - As of January 2, 1994 and January 3, 1993 - Continued
      
  (Dollars in thousands except per share data)                 1993        1992 
                                                           --------    -------- 
 <S>                                                       <C>         <C>                 
  Stockholders' Equity (Note 11) - Continued:
     Less - Cost of shares held in treasury; 
       3,970,000 shares in 1993 and
       3,289,000 shares in 1992                              70,344      58,405 
                                                           --------    -------- 
  Total Stockholders' Equity                                477,534     473,636 
                                                           --------    -------- 
       Total Liabilities and Stockholders' Equity          $768,808    $749,740 
                                                           ========    ======== 
</TABLE>

 
  The accompanying notes are an integral part of these consolidated financial
  statements. 

<PAGE>
 

<TABLE>
<CAPTION>

  CONSOLIDATED STATEMENT OF INCOME - For the Three Years Ended January 2, 1994

  (Dollars in thousands except per share data)        1993        1992        1991 
                                                ----------  ----------  ---------- 
 <S>                                           <C>         <C>         <C>              
  Sales (Note 1):
     Products                                   $1,584,644  $2,042,454  $1,974,260 
     Services                                    1,113,304     746,368     714,282 
                                                ----------  ----------  ---------- 
        Total Sales                              2,697,948   2,788,822   2,688,542 
                                                ----------  ----------  ---------- 

  Costs and Expenses (Notes 4, 12, 13 and 14):
     Cost of sales:
        Products                                 1,343,473   1,777,704   1,723,414 
        Services                                   999,031     645,915     616,831 
                                                ----------  ----------  ---------- 
     Total cost of sales                         2,342,504   2,423,619   2,340,245 
      Selling, general and administrative 
        expenses                                   234,597     242,045     223,102 
                                                ----------  ----------  ---------- 
  Total Costs and Expenses                       2,577,101   2,665,664   2,563,347 
                                                ----------  ----------  ---------- 
        Income From Operations                     120,847     123,158     125,195 

  Other income (expense), net (Note 15)              1,008      (2,083)     (4,837)
                                                ----------  ----------  ---------- 
  Income Before Income Taxes                       121,855     121,075     120,358 
  Provision for Federal and 
     non-U.S. income taxes (Note 16)                42,284      33,296      39,116 
                                                ----------  ----------  ---------- 
        Income Before Cumulative Effect
           of Accounting Changes                    79,571      87,779      81,242 

  Cumulative Effect of Accounting Changes:
     Income taxes (Note 16)                         (7,300)          -           -  
     Postretirement benefits other 
        than pensions (Note 13)                    (13,200)          -           - 
                                                ----------  ----------  ---------- 
        Net Income                              $   59,071  $   87,779  $   81,242 
                                                ==========  ==========  ========== 
  Earnings Per Share (Note 17):
        Income Before Cumulative Effect 
           of Accounting Changes                $     1.41  $     1.56  $     1.45 

     Cumulative Effect of Accounting Changes:
        Income taxes                                  (.13)          -           -               
        Postretirement benefits 
          other than pensions                         (.23)          -           - 
                                                ----------  ----------  ---------- 
        Net Income                              $     1.05  $     1.56  $     1.45 
                                                ==========  ==========  ==========  
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
  statements. 

<PAGE>
 

<TABLE>
<CAPTION>

   CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - For the Three Years Ended January 2, 1994

                                                Capital                         Cost of     Total 
                                              in Excess            Cumulative    Shares    Stock- 
                                       Common    of Par  Retained Translation   Held in   holders 
   (Dollars in thousands)               Stock     Value  Earnings Adjustments  Treasury    Equity 
                                     -------- ---------  -------- -----------  --------  -------- 
  <S>                                <C>       <C>      <C>          <C>      <C>       <C>                 
         Balance, December 30, 1990   $30,051   $ 5,010  $393,909     $10,097  $(69,436) $369,631 
    
   Net income                               -         -    81,242           -         -    81,242 
   Cash dividends ($.42 per share)          -         -   (23,453)          -         -   (23,453)
   Exercise of employee stock options 
     and related income tax benefits        -      (931)        -           -     5,371     4,440 
   Translation adjustments                  -         -         -      (4,147)        -    (4,147)
   Issuance of common stock 
     for employee benefit plans             -         -    (7,459)          -    24,687    17,228 
   Purchase of common stock 
     for treasury                           -         -         -           -   (24,230)  (24,230)
                                      -------   -------  --------     -------  --------  -------- 
         Balance, December 29, 1991    30,051     4,079   444,239       5,950   (63,608)  420,711 

   Net income                               -         -    87,779           -         -    87,779 
   Cash dividends ($.49 per share)          -         -   (27,575)          -         -   (27,575)
   Exercise of employee stock options 
     and related income tax benefits        -      (422)      (43)          -     8,901     8,436 
   Translation adjustments                  -         -         -      (7,273)        -    (7,273)
   Issuance of common stock 
     for employee benefit plans             -         -    (4,744)          -    24,907    20,163 
   Purchase of common stock 
     for treasury                           -         -         -           -   (28,605)  (28,605)
   Effect of 2-for-1 stock 
     split (Note 11)                   30,051    (3,657)  (26,394)          -         -         -
                                      -------   -------  --------     -------  --------   ------- 
         Balance, January 3, 1993      60,102         -   473,262      (1,323)  (58,405)  473,636

   Net income                               -         -    59,071           -         -    59,071 
   Cash dividends ($.52 per share)          -         -   (29,358)          -         -   (29,358)
   Exercise of employee stock options 
     and related income tax benefits        -         -      (298)          -     7,356     7,058 
   Translation adjustments                  -         -         -      (6,964)        -    (6,964)
   Issuance of common stock 
     for employee benefit plans             -         -    (6,614)          -    25,724    19,110 
   Purchase of common stock 
     for treasury                           -         -         -           -   (45,019)  (45,019)
                                      -------   -------  --------     -------  --------- -------- 
         Balance, January 2, 1994     $60,102   $     -  $496,063     $(8,287) $(70,344) $477,534 
                                      =======   =======  ========     =======  ========  ======== 

</TABLE>

   The accompanying notes are an integral part of these consolidated financial 
   statements. 


<PAGE>
 

<TABLE>
<CAPTION>
   CONSOLIDATED STATEMENT OF CASH FLOWS - For the Three Years Ended January 2, 1994

   (Dollars in thousands)                                          1993        1992        1991 
                                                               --------    --------    -------- 
  <S>                                                         <C>         <C>         <C>               
   Cash Flows From Operating Activities:
      Net income                                               $ 59,071    $ 87,779    $ 81,242 
      Adjustments to reconcile net income to
       net cash provided by operating activities:
         Cumulative effect of accounting changes                 20,500           -           -     
         Depreciation and amortization                           37,842      36,292      33,726 
         Losses (gains) on dispositions and investments, net     (3,176)       (169)        530 
         Changes in assets and liabilities, net of
           effects from companies purchased and divested:
              Decrease (increase) in accounts receivable         30,167        (689)    (15,398)
              Decrease (increase) in inventories                 (1,971)     11,179      (2,069)
              Increase (decrease) in accounts payable 
                 and accrued expenses                           (16,798)      2,732      14,073 
              Change in prepaid and deferred taxes               (3,514)    (11,070)     (4,492)
              Other                                              (9,984)      1,753      (3,183)
                                                                -------    --------    -------- 
         Net Cash Provided by Operating Activities              112,137     127,807     104,429 
                                                                -------    --------    -------- 
   Cash Flows From Investing Activities:
      Capital expenditures                                      (27,860)    (22,446)    (26,617)
      Proceeds from dispositions of businesses and
        sales of property, plant and equipment                    9,503       2,593       4,531 
      Cost of acquisitions, net of cash and cash 
        equivalents acquired                                    (32,186)    (58,070)    (23,624)
      Funds held in escrow                                            -           -      21,112 
      Purchases of investment securities                         (2,503)     (1,111)     (3,431)
      Proceeds from sales of investment securities                7,813       5,275      14,473 
                                                               --------    --------    -------- 
         Net Cash Used in Investing Activities                  (45,233)    (73,759)    (13,556)
                                                               --------    --------    -------- 
   Cash Flows From Financing Activities:
      Changes in commercial paper                                 2,977     (10,428)    (35,319)
      Other changes in debt                                     (17,752)     (7,396)       (214)
      Proceeds from issuing common stock                         26,168      28,599      21,668 
      Purchases of common stock                                 (45,019)    (28,605)    (24,230)
      Cash dividends                                            (29,358)    (27,575)    (23,453)
                                                               --------    --------    -------- 
         Net Cash Used in Financing Activities                  (62,984)    (45,405)    (61,548)
                                                               --------    --------    -------- 

   Effect of exchange rate changes on cash and cash equivalents  (1,487)     (1,916)       (458)
                                                               --------    --------    -------- 
         Net Increase in Cash and Cash Equivalents                2,433       6,727      28,867 

   Cash and cash equivalents at beginning of year                69,752      63,025      34,158 
                                                               --------    --------    -------- 
   Cash and cash equivalents at end of year                    $ 72,185    $ 69,752    $ 63,025 
                                                               ========    ========    ========  

<PAGE>
 
<CAPTION>
   CONSOLIDATED STATEMENT OF CASH FLOWS - For the Three Years Ended January 2, 1994 - Continued

   (Dollars in thousands)                                          1993        1992        1991 
                                                               --------    --------    -------- 
  <S>                                                         <C>         <C>         <C> 
   Supplemental Disclosures of Cash Flow Information:
      Cash paid during the year for:
         Interest                                              $  6,819    $  7,486    $  9,445 
         Income taxes                                            36,642      44,985      45,452 

</TABLE>

   The accompanying notes are an integral part of these consolidated financial 
   statements.



            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


   1. Summary of Significant Accounting Policies

   Principles of Consolidation: The consolidated financial statements
   include the accounts of EG&G, Inc. and its subsidiaries (the Company).
   All material intercompany balances and transactions have been eliminated
   in consolidation.

   Sales: Cost-reimbursement sales are recorded as costs are incurred and
   include applicable income in the proportion that costs incurred bear to
   total estimated costs. Sales and income on fixed-price contracts are
   recorded at the completion of the contract, at the end of a contract
   phase for service contracts and at the time of shipment for products. If
   a loss is anticipated on any contract, provision for the entire loss is
   made immediately.

        The Company performs technical, scientific, production and support
   activities under contracts with the U.S. Department of Energy. The
   Consolidated Statement of Income does not include billings and
   associated costs for nonvalue-added support activities. However, the
   fees derived from these support activities were included in sales in the
   amounts of $13.8 million, $16.2 million and $12.3 million in 1993, 1992
   and 1991, respectively.  The shift in sales from products to services
   presented in the Consolidated Statement of Income in 1993 reflects the
   change, compared to 1992, from production to environmental restoration
   services at some of the DOE Support facilities.

   Inventories: Inventories, which include material, labor and
   manufacturing overhead, are valued at the lower of cost or market. The
   majority of inventories is accounted for using the first-in, first-out
   method. All other inventories are accounted for using the last-in,
   first-out method.

   Property, Plant and Equipment: The Company depreciates plant and
   equipment over their estimated useful lives using accelerated methods
   for both financial statement and income tax purposes. For financial
   statement purposes, the estimated useful lives generally fall within the
   following ranges: buildings and special-purpose structures - 10 to 25
   years; leasehold improvements - estimated useful life or remaining term
   of lease, whichever is shorter; machinery and equipment - 3 to 7 years; 

<PAGE>
 

   special-purpose equipment - expensed or over the life of the initial
   related contract. Nonrecurring tooling costs are capitalized while
   recurring costs are expensed.

   Pension Plans: The Company's funding policy provides that payments to
   the U.S. pension trusts shall at least be equal to the minimum funding
   requirements of the Employee Retirement Income Security Act of 1974.
   Non-U.S. plans are generally not funded.

   Foreign Exchange: The balance sheet accounts of non-U.S. operations,
   exclusive of stockholders' equity, are translated at year-end exchange
   rates, and income statement accounts are translated at weighted average
   rates in effect during the year; any translation adjustments are made
   directly to a component of stockholders' equity. The after-tax aggregate
   net transaction gains (losses) were not material for the years
   presented.

   Intangible Assets: Intangible assets result from acquisitions accounted
   for using the purchase method of accounting and include the excess of
   cost over the fair market value of the net assets of the acquired
   businesses. These amounts are being amortized over periods of up to 40
   years.  Subsequent to the acquisition, the Company continually evaluates
   whether later events and circumstances have occurred that indicate the
   remaining estimated useful life of goodwill may warrant revision or that
   the remaining balance of goodwill may not be recoverable.  When factors
   indicate that goodwill should be evaluated for possible impairment, the
   Company uses an estimate of the related business segment's future cash
   flow over the remaining life of the goodwill in measuring whether the
   goodwill is recoverable.

   Cash Flows: For purposes of the Consolidated Statement of Cash Flows,
   the Company considers all highly liquid instruments with a purchased
   maturity of three months or less to be cash equivalents. The carrying
   amount of cash and cash equivalents approximates fair value due to the
   short maturities. 

   Financial Instruments: Disclosures about fair value of financial
   instruments, including the methods and assumptions used to estimate the
   fair values, are included in Notes 6 and 8.


   2.  Acquisitions


        In June 1993, the Company acquired The Wallac Group (Wallac), a
   unit of Procordia AB, for a total purchase price of approximately $46
   million, including related expenses, consisting of $41 million cash and
   a one-year note for $5 million.  This acquisition was accounted for
   using the purchase method.  The excess of the cost over the fair market
   value of the net assets acquired is estimated to be $24 million, which
   is being amortized over 20 years using a straight-line method.  Wallac's
   results of operations were included in the consolidated results of the
   Company from the date of acquisition. 

<PAGE>
 

        Early in the second quarter of 1992, the Company completed the
   acquisition of the Heimann Optoelectronics Division of Siemens AG for
   cash of approximately $60 million, including related expenses. This
   acquisition was accounted for using the purchase method. The excess of
   the cost over the fair market value of the net assets acquired was $23
   million, which is being amortized over 20 years using a straight-line
   method. Heimann's results of operations were included in the
   consolidated results of the Company from the date of acquisition.

        The effect of the purchased acquisitions was not material to the
   results of operations. The products of the acquired companies are
   described elsewhere in this report.


   3. Accounts Receivable

         Accounts receivable as of January 2, 1994 and January 3, 1993
   included unbilled receivables of $67.8 million and $91.1 million,
   respectively, which were due primarily from U.S. Government agencies.
   Accounts receivable were net of reserves for doubtful accounts of $6.1
   million and $5.6 million, respectively.


   4. Inventories

<TABLE>
<CAPTION>
         Inventories as of January 2, 1994 and January 3, 1993 consisted of
   the following:

     (In thousands)                                  1993        1992
                                                 --------    --------
    <S>                                         <C>         <C>
     Finished goods                              $ 30,864    $ 29,801
     Work in process                               30,393      29,902
     Raw materials                                 60,324      54,493
                                                 --------    --------
                                                 $121,581    $114,196
                                                 ========    ========
</TABLE>


         The portion of inventories accounted for using the last-in,
   first-out (LIFO) method of determining inventory costs in 1993 and 1992
   approximated 24% and 27%, respectively, of total inventories. The excess
   of current cost of inventories over the LIFO value was approximately $10
   million at January 2, 1994 and $11 million at January 3, 1993.
 
<PAGE>
 

   5. Property, Plant and Equipment, at Cost


<TABLE>
<CAPTION>
         Property, plant and equipment as of January 2, 1994 and January 3,
   1993 consisted of the following:

    (In thousands)                                   1993        1992
                                                 --------    --------
    <S>                                         <C>         <C>
     Land                                        $ 14,327    $ 15,043
     Buildings and leasehold improvements          91,280      78,828
     Machinery and equipment                      221,809     208,060
                                                 --------    --------
                                                 $327,416    $301,931
                                                 ========    ========
</TABLE>


   6. Investments


<TABLE>
<CAPTION>

         Investments as of January 2, 1994 and January 3, 1993 consisted of
   the following:

     (In thousands)                                  1993        1992
                                                  -------     -------
    <S>                                          <C>         <C>
     Marketable investments                       $ 6,838     $ 3,895
     Other investments                             13,426      18,338
     Joint venture investments                      5,656       4,427
                                                  -------     -------
                                                  $25,920     $26,660
                                                  =======     =======
</TABLE>


         Marketable investments consisted of common stocks and trust
   assets, which were invested in money market funds, fixed income
   securities and common stocks to meet the supplemental executive
   retirement plan obligation. These investments had an aggregate market
   value of $13.1 million and $9.7 million at January 2, 1994 and January
   3, 1993, respectively. At January 2, 1994, gross unrealized gains on
   marketable investments were $6.3 million. The market values were based
   on quoted market prices.

         Other investments consisted of nonmarketable investments in
   private companies and venture capital partnerships, which are carried at
   the lower of cost or net realizable value. The estimated aggregate fair
   value of other investments approximated the carrying amount at 
   January 2, 1994 and January 3, 1993. The fair values of other
   investments were estimated based primarily on the most recent rounds of
   financing and securities transactions and, to a lesser extent, on other
   pertinent information, including financial condition and operating
   results. 

         Joint venture investments are accounted for using the equity
   method. 

<PAGE>
 

         The Company will adopt SFAS No. 115 on accounting for certain
   investments in debt and equity securities in 1994.  This new standard
   requires that available-for-sale investments in equity securities that
   have readily determinable fair values be measured at fair value in the
   balance sheet.  Unrealized holding gains and losses for these
   investments shall be excluded from earnings and reported as a net amount
   in a separate component of stockholders' equity until realized.  The
   Company does not expect at this time that the statement, when adopted,
   will have a material impact on its financial position.


   7. Intangible and Other Assets


<TABLE>
<CAPTION>
         Intangible and other assets as of January 2, 1994 and January 3,
   1993 consisted of the following:

     (In thousands)                                  1993        1992
                                                 --------    --------
    <S>                                         <C>         <C>   
     Intangible assets                           $139,205    $126,540
     Other assets                                  32,555      17,581
                                                 --------    --------
                                                 $171,760    $144,121
                                                 ========    ========
</TABLE>

 
        Intangible assets were shown net of accumulated amortization of
   $25.5 million and $22.2 million at January 2, 1994 and January 3, 1993,
   respectively. The increase in intangible assets was due primarily to the
   acquisition of Wallac in 1993, partially offset by current year
   amortization and the effect of translating goodwill denominated in non-
   U.S. currencies at current exchange rates. The majority of the increase
   in other assets was due to increases in long-term prepaid pension of
   $7.9 million and income taxes of $4.3 million.


   8. Debt

         Short-term debt at January 2, 1994 and January 3, 1993 consisted
   primarily of commercial paper in the amounts of $34.9 million and $32
   million, respectively, which had maturities of less than 90 days.
   Commercial paper borrowings averaged $42.7 million during 1993 at an
   average interest rate of 3.2% compared to average borrowings of $41.8
   million during 1992 at an average interest rate of 4.1%. Current
   maturities of long-term debt are also included in this account.

         The Company has a $150 million multicurrency credit agreement with
   a domestic banking group. It consists of a $100 million three-year
   revolving credit agreement followed by a three-year term loan, and a $50
   million two-year revolving credit agreement followed by a three-year
   term loan. In addition, the Company has multicurrency credit agreements 

<PAGE>
 


   with an international banking group totaling $150 million, consisting of
   a $120 million one-year revolving credit agreement and a $30 million
   two-year revolving credit agreement. These lines of credit serve as
   backup facilities for the commercial paper borrowing.  The Company,
   which is in the process of restructuring its credit agreements, is in
   compliance with all covenants.

         During 1993, the Company terminated its interest rate and currency
   exchange agreement, entered into in 1989, that effectively established a
   73.5 million D-mark principal obligation in exchange for $40 million.
   Long-term liabilities associated with the swap agreement at January 3,
   1993 were $5.3 million, which approximated fair value.

         At January 2, 1994 and January 3, 1993, long-term debt amounts of
   $1.5 million and $2 million, respectively, were included in long-term
   liabilities.  The carrying amount of the Company's long-term debt
   approximated fair value.


   9. Accrued Expenses


<TABLE>
<CAPTION>
         Accrued expenses as of January 2, 1994 and January 3, 1993
   consisted of the following:

     (In thousands)                                  1993        1992
                                                 --------    --------
    <S>                                         <C>         <C>
     Payroll                                     $ 13,375    $ 12,170
     Employee benefits                             46,121      50,377
     Federal, non-U.S. and state income taxes      26,119      14,927
     Other                                         47,099      47,809
                                                 --------    --------
                                                 $132,714    $125,283
                                                 ========    ========
</TABLE>



    10. Contingencies

         The Company is subject to various investigations, claims and legal
   proceedings covering a wide range of matters that arise in the ordinary
   course of its business activities.  Each of these matters is subject to
   various uncertainties, and it is possible that some of these matters may
   be resolved unfavorably to the Company.  The Company has established
   accruals for matters that are probable and reasonably estimable. 
   Management believes that any liability that may ultimately result from
   the resolution of these matters in excess of amounts provided will not
   have a material adverse effect on the financial position or results of
   operations of the Company. 

         In addition, the Company is conducting a number of environmental
   investigations and remedial actions at current and former Company
   locations and, along with other companies, has been named a potentially
   responsible party for certain waste disposal sites. The Company accrues
   for environmental issues in the accounting period in which the Company's 

<PAGE>
 


   responsibility is established and the cost can be reasonably estimated. 
   There have been no environmental problems to date which had or are
   expected to have a material effect on the Company's financial position
   or results of operations.   


   11. Stockholders' Equity

         At January 2, 1994, 4.5 million shares of the Company's common
   stock were reserved for employee benefit plans.

         The Company has nonqualified and incentive stock option plans for
   officers and key employees. Under these plans, options may be granted at
   prices not less than 100% of the fair market value on the date of grant.
   All options are exercisable at the date of grant and expire 10 years
   from the date of grant. The Stock Option Committee of the Board of
   Directors, at its sole discretion, may also include stock appreciation
   rights in any option granted. There are no stock appreciation rights
   outstanding under these plans.


<TABLE>
<CAPTION>
         A summary of certain stock option information is as follows:

     (In thousands)                      1993              1992              1991
                                    --------------   ---------------    -------------- 
                                    Number            Number            Number         
                                      of    Option      of    Option      of    Option 
                                    Shares   Price    Shares   Price    Shares   Price 
                                    ------ -------    ------ -------    ------ ------- 
    <S>                             <S>   <C>         <C>   <C>         <C>   <C>             
     Outstanding, beginning 
        of year                      2,902 $55,126     2,754 $49,984     2,370 $38,315 
     Granted                           726  15,916       678  13,643       706  16,140 
     Exercised                        (355) (6,217)     (510) (8,131)     (318) (4,446)
     Lapsed                            (13)   (279)      (20)   (370)       (4)    (25)
                                     ----- -------     ----- -------     ----- ------- 
     Outstanding and exercisable, 
        end of year                  3,260 $64,546     2,902 $55,126     2,754 $49,984 
                                     ===== =======     ===== =======     ===== ======= 
     Shares available for grant, 
        end of year                  1,144             1,021                48 
                                     =====             =====             ===== 
</TABLE>


         The Company's Employees Stock Purchase Plan was terminated as of
   October 31, 1993. During 1993 and 1992, the Company issued 1.2 million
   shares and 1.1 million shares, respectively, under this plan. 

         On January 22, 1992, the Board of Directors declared a 2-for-1
   stock split, paid May 8, 1992, in the form of a dividend of one
   additional share of the Company's common stock for each share owned by
   stockholders of record at the close of business on April 17, 1992. Par
   value remained at $1 per share. The stock split resulted in the issuance 

<PAGE>


   of 30,051,000 additional shares of common stock from authorized but
   unissued shares. The issuance of authorized but unissued shares resulted
   in the transfer of $3,657,000 from capital in excess of par value and
   $26,394,000 from retained earnings to common stock, representing the par
   value of the shares issued. 

         The Company declared a dividend distribution of one right on each
   share of common stock outstanding on and after February 9, 1987. Each
   right, when exercisable, entitles a stockholder to buy one two-hundredth
   of a share of a new series of preferred stock at a price of $50. The
   rights become exercisable when a person or group acquires 20% or more or
   tenders for 30% or more of the Company's common stock. This preferred
   stock is nonredeemable and will have one vote per share. The rights are
   nonvoting, expire in 1997 and may be redeemed prior to becoming
   exercisable. The Company has reserved 500,000 preferred shares,
   designated as Series B Junior Participating Preferred Stock, for
   issuance upon exercise of such rights. In the event that the Company is
   acquired in a merger or other business combination, each outstanding
   right would entitle a holder to purchase that number of shares of common
   stock of the surviving company which, at the time of such transaction,
   would have a market value of two times the exercise price paid.


   12. Research and Development

         During 1993, 1992 and 1991, Company-sponsored research and
   development expenditures were approximately $34.7 million, $32.1 million
   and $24.7 million, respectively. Customer-sponsored research and
   development, primarily for Department of Energy programs, accounted for
   additional expenditures of approximately $137 million in 1993, $133
   million in 1992 and $127 million in 1991. 


   13. Employee Benefit Plans

         The Company has a savings plan for the benefit of qualified U.S.
   employees.  Under this plan, the Company contributes an amount equal to
   the lesser of 50% of the amount of the employee's voluntary contribution
   or 3% of the employee's annual compensation.  In 1994, the Company
   contribution will be increased to the lesser of 55% of the employee's
   voluntary contribution or 3.3% of the employee's annual compensation.  

<PAGE>
 

         The Company has defined benefit pension plans covering
   substantially all U.S. employees and non-U.S. pension plans for non-U.S.
   employees. The plans provide benefits that are based on an employee's
   years of service and compensation near retirement. Assets of the U.S.
   plan are composed primarily of corporate equity and debt securities.


<TABLE>
<CAPTION>

   Net periodic pension cost included the following components:

     (In thousands)                           1993        1992        1991 
                                          --------    --------    -------- 
    <S>                                  <C>         <C>         <C>
     Service cost - benefits earned 
       during the period                  $  8,398    $  8,164    $  6,608 
     Interest cost on projected 
       benefit obligations                  14,030      12,824      11,184 
     Actual return on plan assets          (18,316)    (11,005)    (14,686)
     Net amortization and deferral           3,852      (1,914)      2,783 
                                          --------    --------    -------- 
                                          $  7,964    $  8,069    $  5,889 
                                          ========    ========    ======== 
</TABLE>


        The increase in 1992 pension costs resulted from the inclusion of
   new participants and the pension expense of Heimann Optoelectronics,
   acquired in 1992.
 
<PAGE>
 


         The following table sets forth the funded status of the principal
   U.S. plan and the principal non-U.S. plans and the amounts recognized in
   the Company's Consolidated Balance Sheet at January 2, 1994 and 
   January 3, 1993:


<TABLE>
<CAPTION>
     (In thousands)                                1993                   1992        
                                            ------------------     ------------------ 
                                            Non-U.S.      U.S.     Non-U.S.      U.S. 
                                            --------  --------     --------  -------- 
   <S>                                      <C>      <C>           <C>      <C>             
    Actuarial present value of 
       benefit obligations:
         Vested benefit obligations          $18,143  $141,325      $13,323  $109,944 
                                             =======  ========      =======  ======== 
         Accumulated benefit 
           obligations                       $20,176  $148,295      $16,094  $115,402 
                                             =======  ========      =======  ======== 
     Projected benefit obligations 
       for service provided to date          $25,673  $173,379      $21,244  $142,778 
     Plan assets at fair value                     -   164,593            -   139,774 
                                             -------  --------      -------  -------- 
     Plan assets less than 
       projected benefit obligations          25,673     8,786       21,244     3,004 
     Unrecognized net transition asset             -     6,010            -     6,762 
     Unrecognized prior service costs         (1,459)    1,041            -      (394)
     Unrecognized net gain (loss)               (635)  (25,213)         925   (10,854)
                                             -------  --------      -------  -------- 
     Accrued pension liability (asset)       $23,579  $ (9,376)     $22,169  $ (1,482)
                                             =======  ========      =======  ======== 

     Assumptions of the principal plan were:
       Discount rate                            7.00%     7.40%       7.50%      8.50%
       Rate of compensation increase            4.50%     5.00%       5.00%      5.82%
       Long-term rate of return on assets          -      9.75%          -      10.00%

</TABLE>


         The non-U.S. accrued pension liability included $22.7 million and
   $21.9 million classified as long-term liabilities as of January 2, 1994
   and January 3, 1993, respectively.  The U.S. pension asset was
   classified as other assets.

         The Company also sponsors a supplemental executive retirement plan
   to provide senior management with benefits in excess of normal pension
   benefits. At January 2, 1994 and January 3, 1993, the projected benefit
   obligations were $10.2 million and $7.1 million, respectively. Assets of
   $4.7 million and $3.3 million, segregated in a trust, were available to
   meet this obligation as of January 2, 1994 and January 3, 1993. Pension
   expense for this plan was approximately $1 million in 1993, $0.9 million
   in 1992 and $0.7 million in 1991.

         Effective January 4, 1993, the Company adopted SFAS No. 106 on
   accounting for postretirement benefits other than pensions for its U.S.
   retiree health benefits.  This statement requires the expected cost of
   postretirement benefits to be charged to expense during the years in
   which employees render service.  This is a change from the prior policy 

<PAGE>
 

   of recognizing these costs as paid.  As part of adopting the new
   standard, the Company recorded a one-time, non-cash charge against
   earnings of $20 million before taxes, or $13.2 million after income 
   taxes ($.23 per share).  This cumulative adjustment represents the
   discounted present value of expected future retiree health benefits
   attributed to employees' service rendered prior to January 4, 1993. 

        The Company provides health care benefits for eligible retired
   U.S. employees under a comprehensive major medical plan or under health
   maintenance organizations where available.  The majority of the
   Company's U.S. employees become eligible for retiree health benefits if
   they retire directly from the Company and have at least 10 years of
   service.  Generally, the major medical plan pays stated percentages of
   covered expenses after a deductible is met, and takes into consideration
   payments by other group coverages and by Medicare.  The Plan requires
   retiree contributions under most circumstances and has provisions for
   cost sharing changes.  For employees retiring after 1991, the Company
   has capped its medical premium contribution based on employees' years of
   service.  The Company funds the amount allowable under a 401(h)
   provision in the Company's defined benefit pension plan.  Assets of the
   plan are composed primarily of corporate equity and debt securities.

         Postretirement medical benefit expense computed under SFAS No. 106
   amounted to $2 million in 1993.  Amounts included in expense for 1992
   and 1991 under the previous cash method of accounting were $0.8 million
   and $0.7 million, respectively.  If the 1993 expense had been determined
   under the cash method of accounting, the amount recognized would have
   been $1 million. 

<PAGE>
 

<TABLE>
<CAPTION>
         Net periodic postretirement medical benefit cost for 1993 included
   the following components:

    (In thousands)                                            1993 
                                                            ------ 
   <S>                                                     <C>  
    Service cost - benefits earned during the period        $  360 
    Interest cost on accumulated benefit obligation          1,686 
    Actual return on plan assets                                (3)
    Net amortization and deferral                                3 
                                                            ------ 
                                                            $2,046 
                                                            ====== 
</TABLE>


<TABLE>
<CAPTION>
        The following table sets forth the plan's funded status and the
  amount recognized in the Company's Consolidated Balance Sheet at January 2,
  1994:

    (In thousands)                                            1993 
                                                           ------- 
   <S>                                                    <C> 
    Accumulated benefit obligation:
       Current retirees                                    $15,638 
       Active employees eligible to retire                   3,134 
       Other active employees                                3,217 
                                                           ------- 
                                                            21,989 
    Plan assets at fair value                                2,003 
                                                           ------- 
    Plan assets less than accumulated benefit obligation    19,986 
    Unrecognized net loss                                     (993)
                                                           ------- 
    Accrued postretirement medical liability               $18,993 
                                                           ======= 
    Assumptions of the plan are:
        Discount rate                                          7.4%
        Health care cost trend:
           First year                                         15.0%
           Ultimate                                            6.0%
           Years to reach ultimate                        10 years 
        Long-term rate of return on assets                    9.75%
</TABLE>


         The accumulated postretirement medical benefit obligation included
   $18 million classified as long-term liabilities as of January 2, 1994.

         If the health care cost trend rate was increased 1%, the accumulated
   postretirement benefit obligation would have increased by approximately
   $1.6 million.  The effect of this increase on the annual cost for 1993
   would be approximately $0.1 million.

         The Company also has an incentive compensation plan for certain
   officers and key employees. Awards under this plan are approved annually by
   the Board of Directors and are limited by certain predetermined criteria. 

<PAGE>
 

         The total expense under all benefit plans referred to above amounted
   to approximately $18.8 million in 1993, $21 million in 1992 and $23.2
   million in 1991.  In addition, the Company maintains various other employee
   benefit plans, including health and life insurance plans.

         The above information does not include amounts related to benefit
   plans applicable to employees associated with contracts with the Department
   of Energy and NASA because the Company is not responsible for the current
   or future funded status of the plans.

         The Company will adopt SFAS No. 112 on accounting for postemployment
   benefits in 1994.  This new standard requires that benefits paid for former
   or inactive employees after employment but prior to retirement must be
   accrued if certain criteria are met.  The Company does not expect at this
   time that the statement, when adopted, will have a material impact on its
   financial position or results of operations.


   14.  Leases

         The Company leases certain property and equipment under operating
   leases.  Rental expense charged to earnings for 1993, 1992 and 1991
   amounted to $18.7 million, $20.6 million and $19.6 million, respectively. 
   Minimum rental commitments under noncancelable operating leases through
   1998 do not exceed $16.7 million annually and aggregate $4.4 million after
   1998.  The above information does not include amounts related to leases
   covered by contracts with the Department of Energy and NASA because the
   costs are reimbursable under the contracts.


   15. Other Income (Expense), Net


<TABLE>
<CAPTION>
   Other income (expense), net, consisted of the following:

     (In thousands)                          1993        1992        1991 
                                          -------     -------     ------- 
    <S>                                  <C>         <C>         <C>
     Interest and dividend income         $ 4,043     $ 3,380     $ 2,789 
     Gains (losses) on investments, net     2,975        (338)       (622)
     Interest expense                      (6,264)     (7,241)     (8,833)
     Other                                    254       2,116       1,829 
                                          -------     -------     ------- 
                                          $ 1,008     $(2,083)    $(4,837)
                                          =======     =======     ======= 
</TABLE>

         Gains (losses) on investments for 1991 included net gains of
   $5.9 million resulting from sales of investment securities and a loss
   of $6.5 million due to a reduction in the carrying value of certain
   nonmarketable investments to their expected realizable values. 

<PAGE>
 

   16. Income Taxes

         Effective January 4, 1993, the Company adopted SFAS No. 109 on
   accounting for income taxes.  This standard determines deferred income
   taxes based on the estimated future tax effects of differences between
   the financial statement and tax basis of assets and liabilities, given
   the provisions of enacted tax laws.  Prior to the implementation of this
   statement, the Company accounted for income taxes under Accounting
   Principles Board Opinion No. 11.  As part of adopting the new standard,
   the Company recorded a one-time, non-cash charge against earnings of
   $7.3 million ($.13 per share).


<TABLE>
<CAPTION>
         The components of income before income taxes for financial
   reporting purposes were as follows:

     (In thousands)                           U.S.    Non-U.S.       Total
                                          --------    --------    --------
    <S>                                  <C>          <C>        <C> 
     1993                                 $103,812     $18,043    $121,855
                                          ========     =======    ========
     1992                                 $110,779     $10,296    $121,075
                                          ========     =======    ========
     1991                                 $105,596     $14,762    $120,358
                                          ========     =======    ========
</TABLE>



<TABLE>
<CAPTION>
   The components of the provision for income taxes were as follows:

   (In thousands)         1993                       1992                       1991              
                ------------------------   ------------------------   ------------------------ 
                           Non-                       Non-                       Non-  
                Federal    U.S.    Total   Federal    U.S.    Total   Federal    U.S.    Total 
                -------  ------  -------   -------  ------  -------   -------  ------  -------  
  <S>          <C>      <C>     <C>       <C>      <C>     <C>       <C>      <C>     <C>           
   Current      $34,936  $6,398  $41,334   $34,147  $4,491  $38,638   $37,972  $5,577  $43,549
   Deferred
    (Prepaid)     1,447    (497)     950    (3,761) (1,581)  (5,342)   (2,268) (2,165)  (4,433)
                -------  ------  -------   -------  ------  -------   -------  ------  ------- 
                $36,383  $5,901  $42,284   $30,386  $2,910  $33,296   $35,704  $3,412  $39,116 
                =======  ======  =======   =======  ======  =======   =======  ======  ======= 
</TABLE>

         The provision for deferred (prepaid) taxes resulted primarily from
   temporary differences in the recognition of income and expenses for tax
   purposes and for financial statement purposes. The sources and tax
   effects related to the following: 


<TABLE>
<CAPTION>
     (In thousands)                           1993        1992        1991 
                                           -------     -------     ------- 
    <S>                                   <C>         <C>         <C>
     Expenses not currently deductible     $ 1,303     $(4,693)    $(2,220)
     Deferred award fee                     (2,363)        604       1,770 
     Other                                   2,010      (1,253)     (3,983)
                                           -------     -------     ------- 
                                           $   950     $(5,342)    $(4,433)
                                           =======     =======     =======  
</TABLE>


<PAGE>
 


<TABLE>
<CAPTION>
         The major differences between the Company's effective tax rate and
   the Federal statutory rate were as follows:

                                          1993       1992       1991 
                                         -----      -----      ----- 
    <S>                                  <C>        <C>        <C>
     Federal statutory rate               35.0%      34.0%      34.0%
     Non-U.S. rate differential, net      (0.6)      (0.7)      (0.8)
     Adjustment of prior estimated 
       tax liabilities                      -        (4.5)      (1.7)
     Sale of an investment                  -        (1.7)        -  
     Other, net                            0.3        0.4        1.0 
                                          ----       ----       ---- 
     Effective tax rate                   34.7%      27.5%      32.5%
                                          ====       ====       ==== 

</TABLE>

         The effect of SFAS No. 109 on the consolidated effective tax rate
   was minimal in 1993.  If SFAS No. 109 had been in effect for 1992 and
   1991, the consolidated effective tax rates would not have changed.


<TABLE>
<CAPTION>
         The tax effects of temporary differences and carry forwards which
   gave rise to prepaid (deferred) income taxes as of January 2, 1994 were
   as follows:

              (In thousands)                                    1993
                                                             ------- 
             <S>                                            <C>      
              Nondeductible reserves                         $ 3,748 
              Untaxed reserves                                (3,948)
              Depreciation                                     7,913 
              Inventory reserves                               5,588 
              State income taxes                               4,430 
              Vacation pay                                     5,107 
              Award and holdback fees                         (5,619)
              Non-U.S. net operating loss carryforwards        9,939 
              Valuation allowance                             (9,939)
              Postretirement health benefits                   7,000 
              Pension contribution                            (2,327)
              All other, net                                  10,342 
                                                             ------- 
              Total Prepaid Taxes                            $32,234 
                                                             ======= 

</TABLE>

         In the above table, prepaid (deferred) income tax items were shown
   as assets or (liabilities) with no netting except for "other," which
   included prepaid tax assets of $19.7 million and deferred tax
   liabilities of $9.4 million.

         At January 2, 1994, the Company had non-U.S. net operating loss
   carryforwards of approximately $22.3 million for income tax purposes
   which either expire in years 1994 through 2000 or carryforward
   indefinitely.  The $9.9 million valuation allowance required under SFAS
   No. 109 represents the tax effect of non-U.S. net operating loss
   carryforwards that are not anticipated to be utilized. 

<PAGE>
 

         Current prepaid income taxes of $18.7 million and $23.2 million at
   January 2, 1994 and January 3, 1993, respectively, were included in
   other current assets. Long-term prepaid income taxes of $13.6 million
   and $9.2 million were included in other long-term assets at January 2,
   1994 and January 3, 1993, respectively.

         In general, it is the practice and intention of the Company to
   reinvest the earnings of its non-U.S. subsidiaries in those operations. 
   Repatriation of retained earnings is done only when it is advantageous.
   Applicable Federal taxes are provided only on amounts planned to be
   remitted. Accumulated net earnings of non-U.S. subsidiaries for which no
   Federal taxes have been provided for 1993, 1992 and 1991 were 
   $66.6 million, $59.1 million and $53 million, respectively, exclusive of
   those amounts that if remitted would result in little or no additional
   tax due to the availability of non-U.S. tax credits.  Federal taxes on
   these earnings would have aggregated  for 1993, 1992 and 1991,
   respectively, $19.5 million, $17.1 million and $16 million.

         The Internal Revenue Service is currently examining the Company's
   Federal income tax returns for the years 1988 through 1990.  The Company
   believes that the results of this examination will not have a material
   effect on its financial position or results of operations.


   17. Earnings Per Share

         Earnings per share of common stock were computed by dividing net
   income by the weighted average number of common shares outstanding. The
   number of shares issuable on the exercise of stock options had no
   material effect on earnings per share. The weighted average number of
   shares used in the earnings per share computations were 56,504,000 for
   1993, 56,385,000 for 1992 and 55,901,000 for 1991.


   18. Industry Segment and Geographic Area Information

         The Company's operations are classified into five industry
   segments:  Technical Services, DOE Support, Instruments, Mechanical
   Components and Optoelectronics. The Company has changed the way its
   products and services are grouped into industry segments to better
   reflect the markets served and the Company's strategies for the future. 
   Data for prior periods have been restated accordingly. The products and
   services of the segments are described elsewhere in the Annual Report.
   Sales and income from operations by industry segment are shown in the
   Segment Sales and Income section of this report; such information with
   respect to 1993, 1992 and 1991 is considered an integral part of this
   note. 

         Sales to U.S. Government agencies, which were predominantly to the
   Department of Energy, the Department of Defense and NASA, were $1,939
   million, $2,035 million and $1,987 million in 1993, 1992 and 1991,
   respectively. The Company currently has five major award-fee contracts
   with the Department of Energy, for which funds are appropriated, work
   scopes are determined and award-fee pools are negotiated annually. The 

<PAGE>
 

   expiration dates for these contracts are as follows: one in 1994, three
   in 1995 and one in 1996. The Idaho contract expires in October 1994, and
   the Company is participating as the majority interest in a joint venture
   that has submitted a proposal for increased work scope at the facility. 
   The Department of Energy's rules concerning contractor liability and
   performance evaluation currently apply to all five contracts. These new
   performance evaluation criteria create greater variability in the
   incentive awards earned. The contractor liability rules provide for
   increased contractor accountability for costs associated with events
   determined to have been avoidable.  This liability is limited to the fee
   earned in the grading period in which the avoidable event occurs. In
   addition, the Department of Energy has announced its intention to
   proceed with a contract reform initiative.  In October 1993, the Company
   was selected by NASA to continue as the base operations contractor at
   the Kennedy Space Center. The new contract has a potential term of 10
   years, including options, contains reductions in contract value and
   could result in reductions in annual fee. 


<TABLE>
<CAPTION>
         Additional information relating to the Company's operations in the
    various industry segments follows:

                                 Depreciation and                 Capital         
    (In thousands)             Amortization Expense             Expenditures    
                            -------------------------    -------------------------
                               1993     1992     1991       1993     1992     1991
                            -------  -------  -------    -------  -------  -------
   <S>                     <C>     <C>       <C>        <C>      <C>      <C>        
    Technical Services      $ 8,422  $ 7,991  $ 7,653    $ 6,315  $ 5,650  $ 4,974
    DOE Support                   -        -        -          -        -        -
    Instruments               9,213    8,131    8,425      6,555    4,768    6,276
    Mechanical Components     6,870    7,755    8,643      5,598    5,290    9,606
    Optoelectronics          12,417   11,595    8,189      8,469    6,305    4,708       
    Corporate                   920      820      816        923      433    1,053
                            -------  -------  -------    -------  -------  -------
                            $37,842  $36,292  $33,726    $27,860  $22,446  $26,617
                            =======  =======  =======    =======  =======  =======
</TABLE>


<TABLE>
<CAPTION>
                                 Identifiable        
  (In thousands)                    Assets   
                           --------------------------
                               1993     1992     1991
                           -------- -------- --------
   <S>                    <C>      <C>      <C>
    Technical Services     $127,917 $133,351 $131,931
    DOE Support              11,959   22,189   17,171
    Instruments             256,117  217,792  215,029
    Mechanical Components    97,317  112,272  133,404
    Optoelectronics         142,630  142,543   90,577
    Corporate               132,868  121,593  109,785
                           -------- -------- --------
                           $768,808 $749,740 $697,897
                           ======== ======== ========
</TABLE>

 
<PAGE>
 

        DOE Support's identifiable assets mainly represent accounts receivable
  for fees from the U.S. Department of Energy. DOE Support's assets do not
  include U.S. Government funds and facilities that are devoted to the contracts
  and for which the Company is custodian. Corporate assets consist primarily of
  cash and cash equivalents, prepaid taxes and investments.


<TABLE>
<CAPTION>
        Information relating to geographic areas follows:

    (In thousands)                Sales                     Income From Operations 
                     --------------------------------     ---------------------------- 
                           1993       1992       1991         1993      1992      1991 
                     ---------- ---------- ----------     --------  --------  -------- 
   <S>              <C>        <C>        <C>            <C>       <C>       <C> 
    U.S.             $2,427,663 $2,532,494 $2,484,972     $129,858  $142,272  $137,346 
    Non-U.S.            270,285    256,328    203,570       18,562    10,781    15,305 
    Corporate                 -          -          -      (27,573)  (29,895)  (27,456)
                     ---------- ---------- ----------     --------  --------  -------- 
                     $2,697,948 $2,788,822 $2,688,542     $120,847  $123,158  $125,195 
                     ========== ========== ==========     ========  ========  ======== 
</TABLE>


<TABLE>
<CAPTION>

    (In thousands)         Identifiable Assets
                       ------------------------------
                           1993       1992       1991
                       --------   --------   --------
   <S>                <C>        <C>        <C>
    U.S.               $317,303   $355,722   $364,990
    Non-U.S.            318,637    272,425    223,122
    Corporate           132,868    121,593    109,785
                       --------   --------   --------
                       $768,808   $749,740   $697,897
                       ========   ========   ========
</TABLE>


        Over 60% of the identifiable assets of the non-U.S. operations are
  located in European Community countries. Transfers between geographic areas
  were not material.
 
<PAGE>
 

  19. Quarterly Financial Information (Unaudited)


<TABLE>
<CAPTION>
    Selected quarterly financial information follows:
                                             
   (In thousands except per share data)                                       
                                                             Quarters                                                         
                                             -------------------------------------- 
                                                First    Second     Third    Fourth        Year 
                                             --------  --------  --------  --------  ---------- 
  <S>                                       <C>       <C>      <C>       <C>        <C>  
   1993
   ----
   Sales                                     $648,926  $662,053  $746,248 $640,721   $2,697,948 
   Income From  Operations                     29,382    31,353    25,119   34,993      120,847 
   Income Before Cumulative Effect
      of Accounting Changes                    19,107    21,068    15,213   24,183       79,571 
   Net Income                                  (1,393)*  21,068    15,213   24,183       59,071*
   Earnings Per Share Before Cumulative 
      Effect of Accounting Changes                .34       .37       .27      .43         1.41 
   Earnings Per Share                            (.02)*     .37       .27      .43         1.05*
   Cash Dividends Per Common Share                .13       .13       .13      .13          .52 

   1992
   ----
   Sales                                      654,828   695,752    749,026  689,216   2,788,822 
   Income From Operations                      27,234    33,481     32,194   30,249     123,158   
   Net Income                                  18,058    21,770     22,096   25,855      87,779 
   Earnings Per Share                             .32       .39        .39      .46        1.56 
   Cash Dividends Per Common Share               .115      .125       .125     .125         .49 

<FN>
   *Includes one-time after-tax charges of $20.5 million, or $.36 per share, due to the Company's
   adoption of SFAS Nos. 106 and 109. 
</TABLE>


<PAGE>
 


 
  REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

   To the Stockholders of EG&G, Inc.:

   We have audited the accompanying consolidated balance sheets of EG&G,
   Inc. (a Massachusetts corporation) and subsidiaries as of January 2, 1994,
   and January 3, 1993, and the related consolidated statements of income,
   stockholders' equity and cash flows for the years ended January 2, 1994,
   January 3, 1993, and December 29, 1991.  These financial statements are
   the responsibility of the Company's management.  Our responsibility is to
   express an opinion on these financial statements based on our audits.

   We conducted our audits in accordance with generally accepted auditing
   standards.  Those standards require that we plan and perform the audit to
   obtain reasonable assurance about whether the financial statements are
   free of material misstatement.  An audit includes examining, on a test
   basis, evidence supporting the amounts and disclosures in the financial
   statements.  An audit also includes assessing the accounting principles
   used and significant estimates made by management, as well as evaluating
   the overall financial statement presentation.  We believe that our audits
   provide a reasonable basis for our opinion.

   In our opinion, the consolidated financial statements referred to above
   present fairly, in all material respects, the financial position of EG&G,
   Inc. and subsidiaries as of January 2, 1994, and January 3, 1993, and the
   results of their operations and their cash flows for the years ended
   January 2, 1994, January 3, 1993, and December 29, 1991, in conformity
   with generally accepted accounting principles.

   As explained in Notes 13 and 16 to the consolidated financial statements,
   effective January 4,  1993, the Company changed its method of accounting
   for postretirement benefits other than pensions and for income taxes.



   Boston, Massachusetts                            /s/Arthur Andersen & Co. 
   January 24, 1994                                 ------------------------ 

                                                    Arthur Andersen & Co.     

<PAGE>
 

   ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
   ---------------------------------------------------------
   ACCOUNTING AND FINANCIAL DISCLOSURE
   -----------------------------------

         None.


                                        PART III

   ITEM l0.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
   ------------------------------------------------------------

   a)  DIRECTORS 

         The information required by this Item with respect to Directors is 
   contained on Pages 3 through 9 of the Company's l994 Proxy Statement under 
   the captions "Election of Directors" and "Information Relative to the 
   Board of Directors and Certain of its Committees" and is herein 
   incorporated by reference.

   b)  EXECUTIVE OFFICERS  


<TABLE>
<CAPTION>

         Listed below are the executive officers as of March 17, 1994.  No 
   family relationship exists between any of the officers.

            Name                    Position                      Age
            ----                    --------                      ---
           <S>                     <C>                           <C> 
            John M. Kucharski       Chairman of the Board,        58
                                    President and Chief 
                                    Executive Officer

            Fred B. Parks           Senior Vice President         46

            Louis P. Valente        Senior Vice President         63

            James O. Zane           Senior Vice President         60

            Murray Gross            Vice President, General       57
                                    Counsel and Clerk

            John F. Alexander, II   Corporate Controller and      37
                                    Acting Chief Financial 
                                    Officer

            Peter A. Broadbent      Treasurer                     55

            Angelo D. Castellana    Vice President                52

            James R. Dubay          Vice President                57

            Dale L. Fraser          Vice President                58
</TABLE>

 
<PAGE>
 

<TABLE>
<CAPTION>
    Listing of Executive Officers - Continued

            Name                    Position                      Age
            ----                    --------                      ---
           <S>                     <C>                           <C>  
            Elmar Illek             Vice President                44

            Deborah S. Lorenz       Vice President                44

            Richard F. Murphy       Vice President                57

            Donald H. Peters        Vice President                53

            Luciano S. Rossi        Vice President                48

            Edward H. Snow          Vice President                57

            Charles M. Williams     Vice President                57

            Louis J. Williams       Vice President                54

            Peter H. Zavattaro      Vice President                56
</TABLE>


         Mr. Kucharski joined the Company in 1972.  He was elected a Vice 
   President in 1979, a Senior Vice President in 1982 and Executive Vice 
   President in 1985.  In 1986 he was elected President and Chief Operating 
   Officer and in 1987 Chief Executive Officer.  

         Dr. Parks joined the Company in 1976.  He was elected a Vice 
   President in 1988 and a Senior Vice President in 1991.

         Mr. Valente joined the Company in 1968.  He was elected Treasurer in 
   1979, a Vice President in 1983, and a Senior Vice President in 1991 and is 
   Director of Acquisitions, Dispositions and Investments.  Mr. Valente did not 
   reflect in his reported holdings on Section 16(a) Form 4, 408 shares of 
   Common Stock held by his wife and with respect to which Mr. Valente 
   disclaims beneficial ownership.  A Form 4 was filed correcting the 
   inadvertent omission in Mr. Valente's reported holdings.

         Mr. Zane joined the Company in 1976.  He was elected a Vice President 
   in 1986 and a Senior Vice President in 1991 and is Group Executive of the
   DOE Support segment.

         Mr. Gross joined the Company in 1971.  He was elected Assistant General
   Counsel and Assistant Clerk in 1978 and Vice President and General Counsel in
   1990. 

         Mr. Alexander joined the Company in 1982.  He was elected Corporate
   Controller in 1991 and was appointed Acting Chief Financial Officer effective
   January 1994.

         Mr. Broadbent joined the Company in 1967.  He was elected Treasurer 
   in 1984.

         Mr. Castellana joined the Company in 1965.  He was elected a Vice 
   President in 1991 and is Chief Operating Officer of the Instruments 
   segment.  

         Mr. Dubay joined the Company in 1971.  He was elected a Vice President 
   in 1988 and is General Manager of EG&G Florida.

 
<PAGE>
 


         Mr. Fraser joined the Company in 1961.  He was elected a Vice 
   President in 1990 and is General Manager of Reynolds Electrical and 
   Engineering Company.

         Mr. Illek joined the Company in 1976.  He was elected a Vice 
   President in 1992 and is Group Executive of the Instruments segment.

         Ms. Lorenz joined the Company in 1990.  She was elected a Vice 
   President in 1992.  From 1980 to 1990 Ms. Lorenz was Assistant Director 
   of Investor Relations at British Petroleum, plc.

         Mr. Murphy joined the Company in 1960.  He was elected a Vice 
   President of the Company in 1987 and is Corporate Director of Human 
   Resources.

         Dr. Peters joined the Company in 1968.  He was elected a Vice 
   President in 1987 and is Director of Planning.

         Mr. Rossi joined the Company in 1967.  He was elected a Vice 
   President in 1988 and is Group Executive of the Mechanical Components 
   segment.  

         Dr. Snow joined the Company in 1977.  He was elected a Vice 
   President in 1992 and is Group Executive of the Optoelectronics segment.

         Mr. C. M. Williams joined the Company in 1973.  He was elected a Vice
   President in 1984 and is Group Executive of the Technical Services segment.

         Mr. L. J. Williams joined the Company in 1973.  He was elected a Vice
   President in 1988 and is Director of Strategic Tax Projects.

         Mr. Zavattaro joined the Company in 1959.  He was elected a Vice 
   President in 1985 and is General Manager of Energy Measurements.


   ITEM ll.  EXECUTIVE COMPENSATION
   --------------------------------

         The information required to be disclosed by this Item is contained in 
   Pages 12 - 21 of the Company's 1994 Proxy Statement from under the caption 
   "Board Compensation Committee Report on Executive Compensation"  up to and 
   including "Aggregated Option Exercises in the Last Fiscal Year and Fiscal 
   Year-End Value Table" and Notes thereto, and is herein incorporated by 
   reference.


   ITEM l2.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
   ------------------------------------------------------------------------

         The information required by this Item is contained on Pages 9-12 of 
   the Company's l994 Proxy Statement under the captions "Security Ownership 
   of Certain Beneficial Owners" and "Security Ownership of Management" and 
   is herein incorporated by reference.

 
<PAGE>
 

   ITEM l3.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
   --------------------------------------------------------

         Not applicable.



                                         PART IV



   ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
   --------------------------------------------------------------------------

   (a)  DOCUMENTS FILED AS PART OF THIS REPORT:

      1. FINANCIAL STATEMENTS 

         Included in Part II, Item 8:

         Consolidated Balance Sheet as of January 2, 1994 and January 3, 1993

         Consolidated Statement of Income for the Three Years Ended 
         January 2, 1994

         Consolidated Statement of Stockholder's Equity for the Three Years 
         Ended January 2, 1994

         Consolidated Statement of Cash Flows for the Three Years Ended 
         January 2, 1994


         Notes to Consolidated Financial Statements

 
        Report of Independent Public Accountants


      2. FINANCIAL STATEMENT SCHEDULES


         Report of independent public accountants on financial statement
         schedules

         Schedule VIII - Valuation and Qualifying Accounts 

         Schedule IX - Short-Term Borrowings

            Financial statement schedules, other than those above, are omitted
      because of the absence of conditions under which they are required or
      because the required information is given in the financial statements or
      notes thereto.

            Separate financial statements of the Registrant are omitted since 
      it is primarily an operating company, and since all subsidiaries 
      included in the consolidated financial statements being filed, in the 
      aggregate, do not have minority equity interests and/or indebtedness 
      to any person other than the Registrant or its consolidated 
      subsidiaries in amounts which together exceed five percent of total 
      consolidated assets.
 
<PAGE>
 


      3. EXHIBITS

      (i)   The  Company's  Restated Articles  of Organization,  as amended to
      date, including all Certificates of Vote of Directors Establishing a 
      Series of a Class of Stock were filed with the Commission on 
      July 16, 1992, as an Exhibit to Form-8 Amendment No. 1 to EG&G's Annual
      Report on Form 10-K for the fiscal year ended December 29, 1991, and are 
      herein incorporated by reference.

      (ii)  The  Company's  By-Laws  as  amended  by  the Board  of Directors on
      April 23, 1991, and on January 22, 1992, were filed with the Commission as
      Exhibit 14 (a)(3).(ii) to EG&G's Annual Report on Form 10-K for the
      fiscal year ended December 29, 1991, and are herein incorporated by 
      reference.

      (iii) The  form of certificate used  to evidence ownership of EG&G Common
      Stock, $1 par value, was filed as Exhibit 4(a) to EG&G's Registration
      Statement on Form S-3, File No. 2-69642, and is herein incorporated by
      reference.

   *  (iv)  The  EG&G, Inc. 1978 Non-Qualified Stock Option Plan as amended by
      the Board of Directors on January 26, 1988, was filed with the Commission
      as Exhibit 14(a)3.(v) to EG&G's Annual Report on Form 10-K for the fiscal
      year ending January 3, 1988, and is herein incorporated by reference.

   *  (v)   The EG&G, Inc. 1982 Incentive Stock Option Plan as amended by the
      Board of Directors on January 24, 1990, was filed with the Commission as
      Exhibit B on pages 37-42 of EG&G's 1990 Proxy Statement, and is
      herein incorporated by reference.

   *  (vi)  The EG&G, Inc. 1992 STOCK OPTION PLAN was filed as Exhibit 4(v) to
      EG&G's Registration Statement on Form S-8, File No. 33-49898, and is 
      herein incorporated by reference.

   *  (vii) Employment Contracts: 

            (1)  Employment contract between John M. Kucharski and EG&G dated
            November 1, 1993.


            (2)  Employment contract between Murray Gross and EG&G dated
            November 1, 1993.

            (3)  Employment contract between John F. Alexander, II and EG&G
            dated November 1, 1993.

            (4)  Employment contract between Peter A. Broadbent and EG&G dated
            November 1, 1993.

            (5)  Employment contract between Angelo Castellana and EG&G dated
            November 1, 1993.

            (6)  Employment contract between James R. Dubay and EG&G dated
            November 1, 1993.

 
<PAGE>
 

            (7)  Employment contract between Dale L. Fraser and EG&G dated
            November 1, 1993.

            (8)  Employment contract between Deborah S. Lorenz and EG&G dated
            November 1, 1993.

            (9)  Employment contract between Richard F. Murphy and EG&G dated
            November 1, 1993.

            (10) Employment contract between Fred B. Parks and EG&G dated
            November 1, 1993.

            (11) Employment contract between Donald H. Peters and EG&G dated
            November 1, 1993.

            (12) Employment contract between Luciano S. Rossi and EG&G dated
            November 1, 1993.

            (13) Employment contract between Edward H. Snow and EG&G dated
            November 1, 1993.

            (14) Employment contract between Louis P. Valente and EG&G dated
            November 1, 1993.

            (15) Employment contract between Charles M. Williams and EG&G dated
            November 1, 1993.

            (16) Employment contract between Louis J. Williams and EG&G dated
            November 1, 1993.

            (17) Employment contract between James O. Zane and EG&G dated
            November 1, 1993.

            (18) Employment contract between Peter H. Zavattaro and EG&G dated
            November 1, 1993.

            Except for the name of the officer in the employment contracts
      identified by numbers 3 through and including 18, the form of said
      employment contracts is identical in all respects.  The employment
      contracts identified by numbers 1 and 2 are identical to each other 
      and are virtually identical to the contracts identified by numbers 3 
      through 18 except that they provide for a longer contract term.  The
      employment contract between Richard F. Murphy and EG&G is 
      representative of the employment contracts of the executive officers,
      and is attached hereto as Exhibit 14(a)(vii).

   *  (viii)  Remunerative Plans:

            (1)  EG&G, Inc. Supplemental Executive Retirement Plan.  Information
      with respect to this item is found following the Notes to Table II on 
      Pages 17-18 of EG&G's 1994 Proxy Statement, and such information 
      is herein incorporated by reference. 

<PAGE>
 

            (2)  EG&G, Inc. Management Incentive Plan.  Information with 
      respect to this item is found on Page 13 of EG&G's 1994 Proxy Statement
      under the caption "Annual Incentive Plan", and such information is 
      herein incorporated by reference.

      (ix)  Power of Attorney (appears on signature page)

      (x)   Subsidiaries of the Registrant

   *  This exhibit is a management contract or compensatory plan or arrangement
      required to be filed as an Exhibit pursuant to Item 14(c) of Form 10-K.


   (b)  REPORTS ON FORM 8-K                                                   
        There have been no reports on Form 8-K filed during the last quarter
   of the the fiscal year ended January 2, 1994.


   (c)  PROXY STATEMENT

         EG&G's 1994 Proxy Statement, in definitive form, was filed
   electronically on March 17, 1994, with the Securities and Exchange Commission
   in Washington, D.C. pursuant to the Commission's Rule 14(a)-6. 


<PAGE>
 


                      REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                                    ON SCHEDULES

   To EG&G, Inc.:

        We have audited in accordance with generally accepted auditing 
   standards, the consolidated financial statements of EG&G, Inc. included 
   in this Form 10-K and have issued our report thereon dated 
   January 24, 1994.  Our audit was made for the purpose of forming an 
   opinion on the basic financial statements taken as a whole.  Schedules 
   VIII and IX are the responsibility of the Company's management and are 
   presented for purposes of complying with the Securities an Exchange 
   Commission's rules and are not part of the basic financial statements.  
   These schedules have been subjected to the auditing procedures applied in 
   the audit of the basic financial statements and, in fairly state in all 
   material respects the financial data required to be set forth therein in 
   relation to the basic financial statements taken as a whole.
                                                   

                                                /s/Arthur Andersen & Co.
   Boston, Massachusetts                        ------------------------
   January 24, 1994                             Arthur Andersen & Co.


    
<PAGE>
 


                                    SCHEDULE VIII
                                    -------------

<TABLE>
<CAPTION>

                             EG&G, INC. AND SUBSIDIARIES

                          VALUATION AND QUALIFYING ACCOUNTS

                      FOR THE THREE YEARS ENDED JANUARY 2, 1994

                                   (In thousands)


                           Balance at    Additions    Accounts                Balance
                            Beginning      Charged     Charged                 at End
   Description                of Year    to Income         Off       Other    of Year
   -----------             ----------    ---------    --------    --------    -------

   Reserve for
   -----------
     Doubtful Accounts
     -----------------
  <S>                         <C>          <C>       <C>         <C>          <C>
   Year Ended
    December 29, 1991          $6,453       $1,448    $(2,111)    $(265)       $5,525


   Year Ended
    January 3, 1993            $5,525       $  254    $  (920)    $ 762(A)     $5,621


   Year Ended
    January 2, 1994            $5,621       $  737    $  (755)    $ 523(B)     $6,126

<FN>
   (A) Includes reserves of $1,378 related to a company acquired in 1992.
   (B) Includes reserves of $705 related to a company acquired in 1993. 
</TABLE>


<PAGE>
 


                                        SCHEDULE IX
                                        -----------


<TABLE>
<CAPTION>
                                 EG&G, INC. AND SUBSIDIARIES

                                    SHORT-TERM BORROWINGS
               
                          FOR THE THREE YEARS ENDED JANUARY 2, 1994

                                       (In thousands)


                                         
                           Balance at   
                          End of Period   
  Category of           -----------------   Maximum Amt. Average Amt.     Weighted
  Aggregate                      Weighted    Outstanding  Outstanding    Avg. Int.
  Short-Term                      Average         During       During  Rate During
  Borrowing             Amount  Int. Rate     The Period   The Period   The Period
  -----------           ------  ---------   ------------ ------------  -----------
  <S>                 <C>          <C>          <C>          <C>            <C>       
   Year Ended
    December 29, 1991:

     Commercial Paper  $42,392       4.9%        $92,550      $69,222         6.3%

     Other Bank Loans  $14,029      10.9%        $14,029      $12,577        11.0%

   Year Ended 
    January 3, 1993:  

     Commercial Paper  $31,964       3.8%        $77,000      $41,777         4.1%

     Other Bank Loans  $ 7,929      10.4%        $14,579      $10,903        10.7%

   Year Ended
    January 2, 1994

     Commercial Paper  $34,941       3.4%        $81,000      $42,731         3.2%

     Other Bank Loans  $ 7,540       8.2%        $11,324      $ 8,501         8.0%

</TABLE>


  The average amount outstanding during the period was based upon daily 
  balances for commercial paper and upon quarter-end balances for other 
  bank loans.

  The weighted average interest rate during the period was calculated based 
  upon daily rates for commercial paper and upon quarter-end rates for other 
  bank loans. 


<PAGE>
 

                      CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

           As independent public accountants, we hereby consent to the 
      incorporation by reference of our reports dated January 24, 1994, 
      included in this Form 10-K, into Registration Statements previously 
      filed by EG&G, Inc. on, respectively, Form S-8, File No. 2-61241;
      S-8, File No. 2-98168; Form S-8, 33-17466; Form S-8, File No. 33-36082;
      Form S-8, File No. 33-35379; Form S-8, File No. 33-35374; Form S-8, 
      File No. 33-43582; Form S-8, File No. 33-49898; and Form S-8, File 
      No. 33-57606.

      Boston, Massachusetts                        /s/Arthur Andersen & Co.   
      March 31, 1994                               ------------------------
                                                   ARTHUR ANDERSEN & CO.       

            
                                 POWER OF ATTORNEY

           We, the undersigned officers and directors of EG&G, Inc., hereby 
      severally constitute John M. Kucharski, and Murray Gross, and each of 
      them singly, our true and lawful attorneys with full power to them, 
      and each of them singly, to sign for us and in our names, in the
      capacities indicated below, this Annual Report on Form 10-K and any and 
      all amendments to said Annual Report on Form 10-K, and generally to do 
      all such things in our name and behalf in our capacities as officers 
      and directors to enable EG&G, Inc. to comply with the provisions of 
      the Securities Exchange Act of 1934, and all requirements of the 
      Securities and Exchange Commission, hereby rectifying and confirming
      signed by our said attorneys, and any and all amendments thereto.

           Witness our hands on the date set forth below.


                                     SIGNATURES

           Pursuant to the requirements of section 13 or 15(d) of the 
      Securities Exchange Act of 1934, the registrant has duly caused this 
      report to be signed on its behalf by the undersigned, thereunto duly 
      authorized.

                                      EG&G, Inc.

      March 30, 1994                  By:/s/John M. Kucharski           
                                         --------------------
                                         John M. Kucharski
                                         Chairman of the Board, President
                                         and Chief Executive Officer
                                         (Principal Executive Officer)

      March 30, 1994                  By:/s/John F. Alexander, II       
                                         ------------------------ 
                                         John F. Alexander, II
                                         Corporate Controller and Acting 
                                         Chief Financial Officer
                                         (Principal Accounting Officer and
                                          Principal Financial Officer) 


<PAGE>
 
           Pursuant to the requirements of the Securities Exchange Act of 1934, 
      this report has been signed below by the following persons on behalf of 
      the registrant and in the capacities and on the date indicated:

      By:  /s/John M. Kucharski  
           --------------------
           John M. Kucharski, Director
      Date:  March 30, 1994


      By: /s/Gail Deegan        
          --------------
          Gail Deegan, Director
      Date:  March 30, 1994


      By:         
           -----------------------
           Dean W. Freed, Director
      Date:  ________________________


      By:     
           -----------------------
           Robert F. Goldhammer, Director
      Date:  ________________________


      By:         
           ----------------------
           John B. Gray, Director
      Date:  ________________________


      By:  /s/Kent F. Hansen       
           -----------------
           Kent F. Hansen, Director
      Date:  March 31, 1994


      By:  /s/Greta Marshall       
           -----------------
           Greta Marshall, Director
      Date:  March 30, 1994


      By:  /s/Samuel Rubinovitz       
           --------------------
           Samuel Rubinovitz, Director
      Date:  March 30, 1994


<PAGE>
 


      By:  /s/William F. Pounds       
           --------------------
           William F. Pounds, Director
      Date:  March 30, 1994

      By:  /s/John Larkin Thompson     
           -----------------------
           John Larkin Thompson, Director
      Date:  March 30, 1994 


      By:  /s/G. Robert Tod       
           ----------------
           G. Robert Tod, Director
      Date:  March 30, 1994


      By:  /s/Joseph F. Turley       
           -------------------
           Joseph F. Turley, Director
      Date:  March 30, 1994 















































                                 EXHIBIT INDEX

Exhibit 
Item 601,
Regulation S-K
- --------------

Exhibit 14(a)3.(vii)  Employment Contract:

          Employment contract between Richard F. Murphy and EG&G, Inc. dated
     November 1, 1993.

Exhibit 21  Subsidiaries of the Registrant





<PAGE>





<TABLE>
<CAPTION>
                                              EXHIBIT 21
                                              ----------
                                    Subsidiaries of the Registrant
                                    ------------------------------
                                              EG&G, Inc.
                                              ----------

   As of March 17, 1994, the following is a list of the parent (Registrant) and its subsidiaries,
   together with their subsidiaries.  Except as noted, all voting securities of the listed
   subsidiaries are 100% beneficially owned by the Registrant or a subsidiary thereof.

                                       State or Country     Number
                                       of Incorporation     of
       Name of Company                 or Organization      Parent
       ---------------                 ---------------      ------
  <S>                                 <C>                  <C>
    1. EG&G, Inc.                      Massachusetts        N/A
    2. EG&G Alabama, Inc.              Alabama                1
    3. EG&G Astrophysics Research 
           Corporation                 California             1
    4. EG&G (Australia) Pty. Ltd.      Australia             21
    5. EG&G Automotive Research, Inc.  Texas                 21
    6. EG&G Birtcher, Inc.             California            35
    7. EG&G Benelux B.V.               Netherlands           77  (77%)   1  (23%)
    8. EG&G Canada Limited             Canada                 1  (10%)  30 (43.5%) 39  (46.5%)
    9. EG&G Chandler Engineering 
           Company                     Oklahoma               1
   10. EG&G Defense Materials, Inc.    Utah                   1
   11. EG&G Dynatrend, Inc.            Delaware               1
   12. EG&G E.C.                       Bahrain               21
   13. EG&G Energy Measurements, Inc.  Nevada                 1
   14. EG&G Environmental, Inc.        Delaware               1
   15. EG&G Exporters Ltd.             U.S. Virgin Islands   21
   16. EG&G Finland OY                 Finland               21
   17. EG&G Florida, Inc.              Florida                1
   18. EG&G Flow Technology, Inc.      Arizona                1
   19. EG&G Gamma Scientific, 
           Incorporated                Delaware              21
   20. EG&G GmbH                       Germany               21
   21. EG&G Holdings, Inc.             Delaware               1 (79%)  29 (8%)  23 (6%)  75 (5%)  9   (2%)
   22. EG&G Idaho, Inc.                Idaho                 21
   23. EG&G Instruments, Inc.          Delaware              21
   24. EG&G Instruments, GmbH          Germany                1
   25. EG&G International Marine 
           Services Ltd.               Hong Kong             24
   26. EG&G Investments, Inc.          Massachusetts          1
   27. EG&G International, Ltd.        Cayman Islands        21
   28. EG&G Japan, Inc.                Delaware              21
   29. EG&G Java Drive, Inc.           California             1
   30. EG&G Judson Infrared, Inc.      Pennsylvania           1
   31. EG&G KT Aerofab, Inc.           California            21
   32. EG&G Langley, Inc.              Virginia              17
   33. EG&G Ltd.                       United Kingdom        21 (80.9%)  3 (19.1%)
   34. EG&G Management Systems, Inc.   New Mexico             1
 
<PAGE>
 
<CAPTION>
   EG&G, Inc. Exhibit 21 Page 2


                                       State or Country     Number
                                       of Incorporation     of
       Name of Company                 or Organization      Parent
       ---------------                 ---------------      ------
  <S>                                 <C>                  <C>
   35. EG&G Metals, Inc.               Massachusetts          1
   36. EG&G Missouri Metal Shaping 
           Company                     Missouri              21
   37. EG&G Mound Applied 
           Technologies, Inc.          Ohio                   1
   38. EG&G Power Systems, Inc         California             1
   39. EG&G Pressure Science 
           Incorporated                Maryland              21
   40. EG&G Rocky Flats, Inc.          Colorado               1
   41. EG&G S.A.                       France                21 (89.6%)  42 (10.4%)
   42. EG&G Sealol, Inc.               Delaware              21
   43. EG&G Sealol Eagle, Inc.         Delaware              42 (51%)
   44. EG&G Sealol (Sealol Egypt)      Egypt                 21 (22%)  27 (78%)
   45. EG&G, SpA                       Italy                 21
   46. EG&G Special Projects, Inc.     Nevada                 1
   47. EG&G Structural 
           Kinematics, Inc.            Michigan               1
   48. EG&G Technical Services of 
           West Virginia, Inc.         West Virginia         51
   49. Intentionally Left Blank
   50. EG&G Ventures, Inc.             Massachusetts          1
   51. EG&G Washington Analytical 
           Services Center, Inc.       District of Columbia   1
   52. Antarctic Support 
           Associates (Partnership)    Colorado               1 (40%)
   53. Asmuss-Sealol (NZ) Limited      New Zealand           21 (25%)
   54. B.A.I. GmbH                     Austria               60
   55. B.A.I. S.A.R.L.                 France                56 (71%)  41 (29%)
   56. Benelux Analytical 
           Instruments S.A.            Belgium                1 (92.3%)
   57. Berthold A.G.                   Switzerland           60
   58. Berthold Analytical 
           Instruments, Inc.           Delaware               1
   59. Berthold France S.A.            France                 1
   60. Berthold GmbH                   Germany                1
   61. Berthold Munchen GmbH           Germany               74 (60%)
   62. Berthold Systems, Inc.          Pennsylvania           1 (30%)
   63. Betron Scientific B.V.          Netherlands           60 (25%)
   64. Biozone Oy                      Finland               88
   65. Dilor SA                        France                41 (20%)
   66. Eagle EG&G Aerospace Co. Ltd.   Japan                  1 (49%)
   67. EC III, Inc.                    New Mexico             1 (50%)
   68. Frank Hill Associates, Inc.     California             1
   69. NOK EG&G Optoelectronics 
           Corporation                 Japan                  1 (49%)
   70. Heimann Optoelectronics GmbH    Germany               74
   71. Intentionally Left Blank 

<PAGE>
 
<CAPTION>
   EG&G, Inc. Exhibit 21 Page 3


                                       State or Country     Number
                                       of Incorporation     of
       Name of Company                 or Organization      Parent
       ---------------                 ---------------      ------
  <S>                                 <C>                  <C>
   72. Heimann Shenzhen 
           Optoelectronics Co. Ltd.    China                 70 (60%)
   73. Idaho Applied Technologies 
           Company                     Idaho                  1 (63%)
   74. Laboratorium Prof. Dr. Rudolf 
           Berthold GmbH & Co          Germany               20 (58.0%)  24 (2.3%)  5 (39.7%)
   75. Reticon Corporation             California             1
   76. Reynolds Electrical & 
           Engineering Co., Inc.       Texas                  1
   77. Rotron Incorporated             New York               1
   78. Pribori Oy                      Finland               88 (97%)
   79. Science Support Corporation     Delaware               1
   80. Sealol Hindustan Limited        India                 42 (20%)
   81. Sealol Kuwait K.S.C.            Kuwait                27 (49%)
   82. Sealol S.A.                     Venezuela             42
   83. Seiko EG&G Co. Ltd.             Japan                  1 (49%)
   84. Shanghai EG&G Reticon 
           Optoelectronics Co. Ltd.    China                 75 (50%)
   85. Societe Civile Immobiliere      France                 1 (82.5%)  59 (17.5%)
   86. Vactec, Inc.                    Missouri               1
   87. WALLAC A/S                      Denmark               88
   88. WALLAC Oy                       Finland               16
   89. WALLAC, Inc.                    Maryland               1
   90. WALLAC Canada, Inc.             Canada                88
   91. WALLAC Norge AS                 Norway                88
   92. WALLAC Sverige AB               Sweden                88
   93. Wellesley B.V.                  Netherlands           95
   94. Westpart, Inc.                  Nevada                42
   95. Wickford N.V.                   Netherlands Antilles  27
   96. Worcester Ltd.                  Cayman Islands        27
   97. Wright Components, Inc.         New York              21

<PAGE>

</TABLE>







                               EXHIBIT 14(a)3(vii)
                               ------------------
                                   EG&G, Inc.
                                   ----------


                              EMPLOYMENT AGREEMENT

              This Agreement made as of the 1st day of November, 1993,
         between EG&G, Inc., a Massachusetts corporation (hereinafter
         called the "Company"), and Richard F. Murphy of Needham,
         Massachusetts (hereinafter referred to as the "Employee").

                                   WITNESSETH:

              WHEREAS, the Employee has been employed in a management
         position with the Company; and

              WHEREAS, the Employee hereby agrees to continue to
         perform such services and duties of a management nature as
         shall be assigned to him; and

              WHEREAS, the Employee hereby agrees to the compensation
         herein provided and agrees to serve the Company to the best of
         his ability during the period of this Agreement.

              NOW, THEREFORE, in consideration of the sum of One
         Dollar, and of the mutual covenants herein contained, the
         parties agree as follows:

         1.   a)  Except as hereinafter otherwise provided, the Company
         agrees to continue to employ the Employee in a management
         position with the Company, and the Employee agrees to remain
         in the employment of the Company in that capacity for a period
         of one year from the date hereof and from year to year
         thereafter until such time as this Agreement is terminated.

              b)  The Company will, during each year of the term of
         this Agreement, place in nomination before the Board of
         Directors of the Company the name of the Employee for election
         as an Officer of the Company except when a notice of
         termination has been given in accordance with Paragraph 5(b).

         2.   The Employee agrees that, during the specified period of
         employment, he shall, to the best of his ability, perform his
         duties,
 and shall not engage in any business, profession or
         occupation which would conflict with the rendition of the
         agreed upon services, either directly or indirectly, without
         the prior approval of the Board of Directors.

         3.   During the period of his employment under this Agreement,
         the Employee shall be compensated for his services as follows: 

<PAGE>
 


              a)  Except as otherwise provided in this Agreement, he
         shall be paid a salary during the period of this Agreement at
         a base rate to be determined by the Company on an annual
         basis.  Except as provided in Subparagraph 3d, such annual
         base salary shall under no circumstances be fixed at a rate
         below the annual base rate then currently in effect.

              b)  He shall be reimbursed for any and all monies
         expended by him in connection with his employment for
         reasonable and necessary expenses on behalf of the Company in
         accordance with the policies of the Company then in effect;

              c)  He shall be eligible to participate under any and all
         bonus, benefit, pension, compensation, and option plans which
         are, in accordance with company policy, available to persons
         in his position (within the limitation as stipulated by such
         plans).  Such eligibility shall not automatically entitle him
         to participate in any such plan;

              d)  if, because of adverse business conditions or for
         other reasons, the Company at any time puts into effect salary
         reductions applicable to all management employees of the
         Company generally, the salary payments required to be made
         under this Agreement to the Employee during any period in
         which such general reduction is in effect may be reduced by
         the same percentage as is applicable to all management
         employees of the Company generally.  Any benefits made
         available to the Employee which are related to base salary
         shall also be reduced in accordance with any salary reduction;

         4.   a)  During the period of his employment by the Company or
         for any period which the Company shall continue to pay the
         Employee his salary under this Agreement, whichever shall be
         the longer, the Employee shall not directly or indirectly own,
         manage, control, operate, be employed by, participate in or be
         connected with the ownership, management, operation or control
         of any business which competes with the Company or its
         subsidiaries, provided, however, that the foregoing shall not
         apply to ownership of stock in a publicly held corporation
         which ownership is disclosed to the Board of Directors nor
         shall it apply to any other relationship which is disclosed to
         and approved by the Board of Directors.

              b)  During the period of his employment by the Company
         and two years following the Company's last payment of salary
         to him, the Employee shall not utilize or disclose to others
         any proprietary or confidential information of any type or
         description which term shall be construed to mean any
         information developed or identified by the Company which is
         intended to give it an advantage over its competitors or which
         could give a competitor an advantage if obtained by him.  Such
         information includes, but is not limited to, product or
         process design, specifications, manufacturing methods, 

<PAGE>
 


         financial or statistical information about the Company,
         marketing or sales information about the Company, sources or
         supply, lists of customers, and the Company's plans,
         strategies, and contemplated actions.

              c)  During the period of his employment by the Company or
         for any period during which the Company shall continue to pay
         the Employee his salary under this Agreement, whichever shall
         be longer, the Employee shall not in any way whatsoever aid or
         assist any party seeking to cause, initiate or effect a Change
         in Control of the Company as defined in Paragraph 6 without
         the prior approval of the Board of Directors.

         5.   Except for the Employee covenants set forth in Paragraph
         4 which covenants shall remain in effect for the periods
         stated therein, and subject to Paragraph 6, this Agreement
         shall terminate upon the the happening of any of the following
         events and (except as provided herein) all the Company's
         obligation under this Agreement, including, but not limited
         to, making payments to the Employee shall cease and terminate:

              a)  On the effective date set forth in any resignation
         submitted by the Employee and accepted by the Company, or if
         no effective date is agreed upon, the date of receipt of such
         letter.

              b)  One year after written notice of termination is given
         by either party to the other party.

              c)  At the end of the month in which the Employee shall
         have attained the age of sixty-five years;

              d)  At the death of the Employee;

              e)  At the termination of the Employee for cause.  As
         used in the Agreement, the term "cause" shall mean:

                  1)  Misappropriating any funds or property of the
         Company;

                  2)  Unreasonable refusal to perform the duties
         assigned to him under this Agreement;

                  3)  Conviction of a felony;

                  4)  Continuous conduct bringing notoriety to the
         Company and having an adverse effect on the name or public
         image of the Company;

                  5)  Violation of the Employee's covenants as set
         forth in Paragraph 4 above; or 

<PAGE>
 


                  6)  Continued failure by the Employee to observe any
         of the provisions of this Agreement after being informed of
         such breach.

              f)  At termination of the Employee by the Company without
         cause.

              g)  Twelve months after written notice of termination is
         given by the Company to the Employee based on a determination
         by the Board of Directors that the Employee is disabled
         (which, for purposes of this Agreement, shall mean that the
         Employee is unable to perform his regular duties, with such
         determination to be made by the Board of Directors, in
         reliance upon the opinion of the Employee's physician or upon
         the opinion of one or more physicians selected by the
         Company).  Such notice shall be given by the Company to the
         Employee on the 106th day of continuous disability of the
         Employee.  Notwithstanding the foregoing, if, during the
         twelve-month notice period referred to above, the Employee is
         no longer disabled and is able to return to work, such notice
         of employment termination shall be rescinded, and the
         employment of  the Employee shall continue in accordance with
         the terms of this Agreement.  During the first 106 days of
         continuous disability of the Employee, the Company will make
         periodic payments to the Employee in an amount equal to the
         difference between his base salary and the benefits provided
         by the Company's Short-Term Disability Income Plan.  During
         the twelve-month notice period following 106 days of
         continuous disability, the Company will make periodic payments
         to the Employee in an amount equal to the difference between
         his base salary and the benefits provided by the Company's
         Long-Term Disability Plan.  If the employment of the Employee
         terminates at the end of such twelve-month notice period, the
         Company will make periodic payments to the Employee, up to the
         amount remaining in his sick leave reserve account, in an
         amount equal to the difference between  his base pay and the
         post-employment benefits provided to him under the Company's
         Long-Term Disability Plan.  Due to the fact that payments to
         the Employee under the Company's Long-Term Disability Plan are
         not subject to federal income taxes, the payments to be made
         directly by the Company pursuant to the two preceding
         sentences shall be reduced such that the total amount received
         by the Employee (from the Company and from the Long-Term
         Disability Plan), after payment of any income taxes, is equal
         to the amount that the Employee would have received had he
         been paid his base salary, after payment of any income taxes
         on such base salary.

              h)  Notwithstanding the foregoing provisions, in the
         event of the termination of the Employee by the Company
         without cause, the Employee shall, until the expiration of his
         then current employment term or one year from the date of such
         termination, whichever is later, (i) continue to receive his
         Full Salary (as defined below), which shall be payable in 

<PAGE>
 


         accordance with the payment schedule in effect immediately
         prior to his employment termination, and (ii) continue to be
         entitled to participate in all employee benefit plans and
         arrangements of the Company (such as life, health and
         disability insurance and automobile arrangements) to the same
         extent (including coverage of dependents, if any) and upon the
         same terms as were in effect immediately prior to his
         termination.  For purposes of this Agreement, "Full Salary"
         shall mean the Employee's annual base salary, plus the amount
         of any bonus or incentive payments received by the Employee
         with respect to the last full fiscal year of the Company for
         which all bonus or incentive payments to be made have been
         made.

         6.   a)  In the event that there is a Change in Control of the
         Company (as defined below), the provisions of this Agreement
         shall be amended as follows:

                  1)  Paragraph 1a shall be amended to read in its
         entirety as follows:

                  "Except as hereinafter otherwise provided, the
              Company agrees to continue to employ the Employee in a
              management position with the Company, and the Employee
              agrees to remain in the employment in the Company in that
              capacity, for a period of five (5) years less one day
              from the date of the Change in Control.  Except as
              provided in Paragraph 3d, the Employee's salary as set
              forth in Paragraph 3a and his other employee benefits
              pursuant to the plans described in Paragraph 3c shall not
              be decreased during such period."

                  2)  Paragraph 5a shall be amended by the addition of
         the following provision at the end of such paragraph:

                  ", provided that the Employee agrees not to resign,
              except for Good Reason (as defined below), during the
              one-year period following the date of the Change in
              Control."

                  3)  Paragraph 5b shall be deleted in its entirety.

                  4)  Paragraph 5h shall be amended to read in its
         entirety as follows:

                  "Notwithstanding the foregoing provisions, in the
              event of the termination of the Employee by the Company
              without cause, or the resignation of the Employee for
              Good Reason, the Employee shall (i) receive, on the date
              of his employment termination, a cash payment in an
              amount equal to his Full Salary (as defined below)
              multiplied by the number of years (including any portions
              thereof) remaining until the expiration of his then
              current employment term or five years from the date of 

<PAGE>
 


              such termination, whichever is later (it being agreed
              that such amount shall not be discounted based upon the
              present value of such amount), and (ii) continue to be
              entitled to participate in all employee benefit plans and
              arrangements of the Company (such as life, health and
              disability insurance and automobile arrangements) to the
              same extent (including coverage of dependents, if any)
              and upon the same terms as were in effect immediately
              prior to his termination.  For purposes of this
              Agreement, "Full Salary" shall mean the Employee's annual
              base salary, plus the amount of any bonus or incentive
              payments received by the Employee with respect to the
              last full fiscal year of the Company for which all bonus
              or incentive payments to be made have been made. 
              Payments under this Paragraph 5h shall be made without
              regard to whether the deductibility of such payments (or
              any other "parachute payments," as that term is defined
              in Section 280G of the Internal Revenue Code of 1986, as
              amended (the "Code"), to or for the benefit of the
              Employee) would be limited or precluded by Section 280G
              and without regard to whether such payments (or any other
              "parachute payments" as so defined) would subject the
              Employee to the federal excise tax levied on certain
              "excess parachute payments" under Section 4999 of the
              Code; provided that if the total of all "parachute
              payments" to or for the benefit of the Employee, after
              reduction for all federal, state and local taxes
              (including the tax described in Section 4999 of the Code,
              if applicable) with respect to such payments (the "Total
              After-Tax Payments"), would be increased by the
              limitation or elimination of any payment under this
              Paragraph 5h, amounts payable under this Paragraph 5h
              shall be reduced to the extent, and only to the extent,
              necessary to maximize the Total After-Tax Payments.  The
              determination as to whether and to what extent payments
              under this Paragraph 5h are required to be reduced in
              accordance with the preceding sentence shall be made at
              the Company's expense by Arthur Andersen & Co. or by such
              other certified public accounting firm as the Board of
              Directors of the Company may designate prior to a Change
              in Control of the Company. In the event of any
              underpayment or overpayment under this Paragraph 5h as
              determined by Arthur Andersen & Co. (or such other firm
              as may have been designated in accordance with the
              preceding sentence), the amount of such underpayment or
              overpayment shall forthwith be paid to the Employee or
              refunded to the Company, as the case may be, with
              interest at the applicable federal rate provided for in
              Section 7872(f)(2) of the Code." 

<PAGE>
 


              5)  Paragraph 8 shall be amended to read in its entirety
         as follows:

              "The Employee may pursue any lawful remedy he deems
              necessary or appropriate for enforcing his rights under
              this Agreement following a Change in Control of the
              Company, and all costs incurred by the Employee in
              connection therewith (including without limitation
              attorneys' fees) shall be promptly reimbursed to him by
              the Company, regardless of the outcome of such endeavor."

              b)  For purposes of this Agreement, a "Change in Control
         of the Company" shall occur or be deemed to have occurred only
         if (i) any "person", as such term is used in Section 13(d) and
         14(d) of the Securities Exchange Act of 1934, as amended (the
         "Exchange Act") (other than the Company, any trustee or other
         fiduciary holding securities under an employee benefit plan of
         the Company, or any corporation owned directly or indirectly
         by the stockholders of the Company in substantially the same
         proportion as their ownership of stock in the Company), is or
         becomes the "beneficial owner" (as defined in Rule 13d-3 under
         the Exchange Act), directly or indirectly, of securities of
         the Company representing 30% or more of the combined voting
         power of the Company's then outstanding securities; (ii)
         during any period of two consecutive years ending during the
         term of this Agreement, individuals who at the beginning of
         such period constitute the Board of Directors of the Company,
         and any new director whose election by the Board of Directors
         or nomination for election by the Company's stockholders was
         approved by a vote of at least two-thirds of the directors
         then still in office who were either directors at the
         beginning of the period or whose election or whose nomination
         for election was previously so approved, cease for any reason
         to constitute a majority of the Board of Directors; (iii) the
         stockholders of the Company approve a merger or consolidation
         of the Company with any other corporation, other than a merger
         or consolidation which would result in the voting securities
         of the Company outstanding immediately prior thereto
         continuing to represent (either by remaining outstanding or by
         being converted into voting securities of the surviving
         entity) more than 50% of the combined voting power of the
         voting securities of the Company or such surviving entity
         outstanding immediately after such merger or consolidation; or
         (iv) the stockholders of the Company approve a plan of
         complete liquidation of the Company or an agreement for the
         sale or disposition by the Company of all or substantially all
         of the Company's assets.

              c)  For purposes of this Agreement, "Good Reason" shall
         mean the occurrence of any of the following events, except as
         provided in Paragraph 3d: (i) a reduction in the Employee's
         base salary as in effect on the date hereof or as the same may
         be increased from time to time; (ii) a failure by the Company
         to pay annual cash bonuses to the Employees in an amount at 

<PAGE>
 


         least equal to the most recent annual cash bonuses paid to the
         Employee; (iii) a failure by the Company to maintain in effect
         any material compensation or benefit plan in which the
         Employee participated immediately prior to the Change in
         Control, unless an equitable arrangement has been made with
         respect to such plan, or a failure to continue the Employee's
         participation therein on a basis not materially less favorable
         than existed immediately prior to the Change in Control; (iv)
         any significant and substantial diminution in the Employee's
         position, duties, responsibilities or title as in effect
         immediately prior to the Change in Control; (v) any
         requirement by the Company that the location at which the
         Employee performs his principal duties be changed to a new
         location outside a radius of 25 miles from the Employee's
         principal place of employment immediately prior to the Change
         in Control; or (vi) any requirement by the Company that the
         Employee travel on an overnight basis to an extent not
         substantially consistent with the Employee's business travel
         obligations immediately prior to the Change in Control. 
         Notwithstanding the foregoing, the resignation shall not be
         considered to be for Good Reason if any such circumstances are
         fully corrected prior to the date of resignation.

         7.   Neither the Employee nor, in the event of his death, his
         legal representative, beneficiary or estate, shall have the
         power to transfer, assign, mortgage or otherwise encumber in
         advance any of the payments provided for in this Agreement,
         nor shall any payments nor assets or funds of the Company be
         subject to seizure for the payment of any debts, judgments,
         liabilities, bankruptcy or other actions.

         8.   Any controversy relating to this Agreement and not
         resolved by the Board of Directors and the Employee shall be
         settled by arbitration in the City of  Boston, Commonwealth of
         Massachusetts, pursuant to the rules then obtaining of the
         American Arbitration Association, and judgment upon the award
         may be entered in any court having jurisdiction, and the Board
         of Directors and Employee agree to be bound by the arbitration
         decision on any such controversy.  Unless otherwise agreed by
         the parties hereto, arbitration will be by three arbitrators
         selected from the panel of the American Arbitration
         Association.  The full cost of any such arbitration shall be
         borne by the Company.

         9.   Failure to insist upon strict compliance with any of the
         terms, covenants, or conditions hereof shall not be deemed a
         waiver of such term, covenant, or condition, nor shall any
         waiver or relinquishment of any right or power hereunder at
         any one or more times be deemed a waiver or relinquishment of
         such right or power at any other time or times by either
         party. 

<PAGE>
 


         10.  All notices or other communications hereunder shall be in
         writing and shall be deemed to have been duly given when
         delivered personally to the Employee or to the General Counsel
         of the Company or when mailed by registered or certified mail
         to the other party (if to the Company, at 45 William Street,
         Wellesley, Massachusetts 02181, attention General Counsel; if
         to the Employee, at the last known address of the Employee as
         set forth in the records of the Company).

         11.  This Agreement has been executed and delivered and shall
         be construed in accordance with the laws of the Commonwealth
         of Massachusetts.  This Agreement is and shall be binding on
         the respective legal representatives or successors of the
         parties, but shall not be assignable except to a successor to
         the Company by virtue of a merger, consolidation or
         acquisition of all or substantially all of the assets of the
         Company.  All previous employment contracts between the
         Employee and the Company or any of the Company's present or
         former subsidiaries or affiliates is hereby cancelled and of
         no effect.

              IN WITNESS WHEREOF, the Company has caused its seal to be
         hereunto affixed and these presents to be signed by its proper
         officers, and the Employee has hereunto set his hand and seal
         the day and year first above written.

                                       EG&G, INC.


         (SEAL)                        By:  /s/John M. Kucharski
                                            --------------------
                                            John M. Kucharski,
                                              Chairman and Chief
                                              Executive Officer



                                       Employee:  /s/Richard F. Murphy
                                                  --------------------
                                                  Richard F. Murphy

<PAGE>